Finding 37869 (2022-001)

Supportive Housing for the Elderly ALN No. 14.157 U.S. Department of Housing and Urban Development (HUD) Project No. 082-EE175 Program Year 2022 Criteria or Specific Requirement ? Special Tests and Provisions: Residual Receipts Account (24 CFR 891.400(e)) Condition ? The required annual deposit to the residual receipts account was not made within 60 days following year-end. Questioned Costs ? None Context ? The Project is required to calculate surplus cash at the end of each fiscal year and any amount greater than zero is required to be deposited to a federally insured residual receipts account within 60 days of year-end. The Project properly calculated surplus cash; however, funds were not deposited into a residual receipts account within the required time frame. Effect ? The Project did not comply with the residual receipts compliance requirement. Cause ? The Project was in the process of changing responsible parties for depositing surplus cash. Identification as a Repeat Finding ? Not a repeat finding. Recommendation ? Management should create policies and procedures for future instances of surplus cash that will ensure compliance with this requirement. View of Responsible Officials and Planned Corrective Actions ? Surplus cash is calculated on a monthly basis. All residual receipts are required to be deposited in a separate federally insured account within 60 days of the fiscal year-end. The Project deposited cash surplus into a residual receipts account for fiscal year-end September 30, 2022; however, the funds were not deposited until after the 60-day deadline. Management will create policies and procedures for future instances of surplus cash that will ensure compliance with this requirement Responsible party is now Katie Jenkins, Senior Accountant.