Finding Text
Residual Receipts Deposits: Criteria: The project's HUD Regulatory Agreement requires surplus cash to be deposited into the residual receipts reserve account in accordance with the terms of the agreement. Condition: The project reported surplus cash of $44,485 for the prior fiscal year. However, the $44,485 was not deposited into the residual receipts reserve account as required. Questioned Costs: None. Context: The HUD Regulatory Agreement requires the project to calculate surplus cash and deposit the required amount into the residual receipts reserve account. Residual receipts are restricted funds maintained for project purposes in accordance with HUD requirements. For the prior fiscal year, the project calculated surplus cash of $44,485 that was required to be deposited into the residual receipts reserve account. Cause: Management indicated that the required deposit of prior-year surplus cash was inadvertently missed. Effect: As a result, the residual receipts reserve account was underfunded by $44,485, and the project was not in compliance with the surplus cash provisions of its HUD Regulatory Agreement. Recommendation: We recommend that management deposit the $44,485 of prior-year surplus cash into the residual receipts reserve account and establish procedures to ensure that required surplus cash deposits are identified, monitored, and made timely in accordance with the HUD Regulatory Agreement. View of Responsible Official: See attached Corrective Action Plan