Finding 1227939 (2025-001)

Finding 2025-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: St. Luke Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 90 days of the Project’s fiscal year-end. Condition: The required deposit of $19,309 for the year ended September 30, 2024 was made on January 8, 2025, which is after the 90 day deadline. Context: We reviewed the residual receipts deposits during the year. Cause: St. Luke Apartments’ surplus cash was not performed timely. Effect: St. Luke Apartments is not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Questioned Costs: None. This finding relates to timeliness of remittance and did not represent costs charged to a federal award that were unsupported or unallowable. Recommendation: St. Luke Apartments should ensure residual receipts are made within 90 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: St. Luke Apartments agrees with the finding and the required payment was made on January 8, 2025.