Finding Text
2026-002 Deposits in excess of FDIC insured limits Federal Agency United States Department of Housing and Urban Development Assistance Listing 14.157 – Supportive Housing for the Elderly (Section 202) Award Numbers 171-EE027 Criteria [X] Compliance Finding [X] Significant Deficiency [ ] Material Weakness The loan program requires all bank deposits be deposited into accounts insured by the FDIC and the Organization must obtain insurance for any amounts in excess of the $250,000 FDIC limit or split deposits between banks to maintain coverage over all bank deposits. Condition Total bank deposits at May 31, 2026, maintained at one bank exceeded the FDIC insurance limit by approximately $63,000. Context This finding appears to be an isolated problem. Cause Cash amounts over the FDIC insured limits of $250,000 were not split between banks to maintain coverage and the Organization did not obtain collateral coverage for amounts over the FDIC limit. Effect The Organization is out of compliance with the HUD loan program requirements and amounts over FDIC insured limits may be at risk. Recommendation We recommend the Organization split cash deposits between multiple banks or work with their current bank to ensure amounts in excess of the FDIC limits are fully insured and collateralized. Views of responsible officials and planned corrective actions Appleway Court 202 will review the current deposit situation and related FDIC coverage and split cash deposits between multiple banks or work with our current bank to ensure that amounts in excess of FDIC limits are fully insured and collateralized.