Finding Text
Finding reference number: #2025-002 Assistance Listing (federal award identification number and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, CFDA No. 14.155 (Project identification number 047-11056, 2007) Auditor non-compliance code: B – Failure to make required residual receipt deposit Finding resolution status: Outstanding Universe population size: The universe population size is not applicable to the finding. Statistically valid sample: Not applicable Name of federal agency: Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $40,444 Was the sampling statistically valid: N/A Statement of condition of #2025-002: The required residual receipts deposit in the amount of $40,444 per the 2024 Computation of Surplus Cash, Distributions and Residual Receipts was not deposited into a residual receipts fund within ninety (90) days after fiscal year end. Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to deposit surplus cash into a separate residual receipts fund within ninety (90) days after the fiscal year end. Effect or potential effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. Cause: Due to administrative delays, the 2024 audit report was not issued until December 18, 2025. Recommendation: Management should make all required residual receipts deposits per the annual Computation of Surplus Cash, Distributions and Residual Receipts within ninety (90) days after the fiscal year end. Reporting response: Management concurs. The 2024 surplus cash computation, and therefore the amount due to residual receipts, was not available until the 2024 audited financial statements were issued on December 18, 2025. No distributions were made from project funds in 2024 or 2025, and the funds remained in the Corporation's operating account and were used for project operations. The Corporation established a residual receipts account in the name of the Corporation and deposited the full $40,444, with $14,487 deposited on September 17, 2026 and the remaining $25,957 will be deposited in 2026. The 2025 computation of surplus cash reflects a deficiency, and no additional deposit is due for 2025. Going forward, the annual computation will be completed with the audit and any required deposit made within ninety days of year-end.