Finding 1229270 (2025-003)

Condition: During our audit, we noted that the Organization did not make the required deposit to the residual receipts account within the timeframe prescribed by HUD. Specifically, the required residual receipts deposit for the period ended December 31, 2024, totaling $1,438, had not been made as of the date of our testing. Criteria: HUD audit guidance for residual receipts requires the Organization to establish a residual receipts account and make required deposits into that account in accordance with HUD requirements within the required timeframe. Cause: The noncompliance occurred because management did not follow HUD approval procedures prior to withdrawing funds. This appears to have resulted from a misunderstanding of HUD requirements and lack of review procedures. Effect: Failure to make the required residual receipts deposit within the required timeframe results in noncompliance with HUD residual receipts requirements. Recommendation: We recommend that management assign responsibility to a designated individual for monitoring residual receipts requirements and deposit deadlines. Views of Responsible Officials: The Organization will assign responsibility to a designated individual for monitoring residual receipt requirements and deposit deadlines.