Finding 1796 (2023-001)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2023-11-14

AI Summary

  • Core Issue: Surplus cash of $4,311 was not deposited into the residual receipts account within the required 90 days after fiscal year end.
  • Impacted Requirements: Failure to comply with the Regulatory Agreement led to an underfunded residual receipts account.
  • Recommended Follow-Up: Implement a review process for surplus cash calculations to ensure timely deposits in the future.

Finding Text

Type of Finding: Federal Awards Finding. Finding Resolution Status: Resolved. Criteria: Per the Regulatory Agreement, project surplus cash is required to be deposited to the residual receipts account within 90 days after fiscal year end. Statement of Condition: The Project had surplus cash of $4,311 as of July 31, 2022. Cause: The surplus cash calculation provided in the prior fiscal year end audit was not reviewed. Effect: Residual receipts account is underfunded by $4,311. Auditor Non-Compliance Code: B. Failure to make required residual receipts deposits. FHA/Contract Number: FHA/Contract 101-EH132 Questioned Costs: $4,311. Reporting Views of Responsible Officials: The surplus cash calculation for Colorado Odd Fellows Three Links Apartments was provided to the Board with the financial statement audit but the required deposit was not made to the Residual Receipts account. Once the error was discovered, the prior year surplus cash of $4,311 was deposited to the residual receipts account. To eliminate this error in the future, we have adopted a review process that requires the Board President or the project CPA to review the Surplus Cash Calculation Schedule provided with the year end audited financial statements, approve the calculation, and deposit surplus cash per the calculation to the residual receipts account. Context: The surplus cash calculation provided in the prior fiscal year end audit was not reviewed. Recommendation: Make deposit of surplus cash to residual receipts account as required by the Regulatory Agreement. The Board should review the surplus cash calculation provided in the annual audit and transfer surplus cash from the operations account to the residual receipts account no later than 90 days after fiscal year end. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Concur. Agree or Disagree with Auditor: Agree. Completion Date: October 2, 2023. Response: Colorado Odd Fellows Three Links Corporation will adopt a review process that requires the Board President or the project's CPA to review and approve the calculation before transferring funds from the operations account to the residual receipts account.

Corrective Action Plan

Colorado Odd Fellows Three Links Corporation will adopt a review process that requires the Board President or the project's CPA to review and approve the calculation before transferring funds from the operations account to the residual receipts account.

Categories

Cash Management HUD Housing Programs Reporting

Other Findings in this Audit

  • 578238 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $1.12M
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $479,758