Finding 260 (2023-001)

Requirement

Questioned Costs

Year

2023

Accepted

2023-10-11

Audit: 506

Organization: Middletown Homes, Inc. (NJ)

Auditor: Mercadien PC Certified Public Accountants

AI Summary

Core Issue: Funds were not held in an interest-bearing account as required by HUD regulations.
Impacted Requirements: The failure to earn interest on replacement reserve funds violates the HUD regulatory agreement.
Recommended Follow-Up: Transfer the funds to an interest-bearing account to comply with regulations.

Finding Text

Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811). Criteria or specific requirement: In accordance with the HUD regulatory agreement, the replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. Condition: The Organization failed to hold funds in an interest-bearing account. No interest was earned during the year. Cause: There was an oversight by management when opening a new bank account for these funds. Recommendation: We recommend that the funds be transferred into an interest-bearing account. Views of responsible officials (and planning corrective actions): Management agrees with the recommendations provided. See Corrective Action Plan.

Corrective Action Plan

Identifying Number: 2023-001 Finding: The Organization did not hold replacement reserve funds in an interest-bearing account. Contact Person Responsible for Corrective Action: Richard Manall, CFO Corrective Action Taken or Planned: Management reached out to Fulton Bank to move these funds into a federally insured interest-bearing account. Anticipated Completion Date: September 1, 2023.

Other Findings in this Audit

576702 2023-001

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Programs in Audit

ALN	Program Name	Expenditures
14.181	Supportive Housing for Persons with Disabilities	$44,886