Finding Text
Finding #2022-006: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 Condition: In December 2022, the Partnership made related party repayments of $60,677. Cash available for distribution June 30, 2022 and December 31, 2021 was $-0-. The Partnership made payments in excess of surplus cash of $60,677. Criteria: The HUD Regulatory Agreement requires the Partnership to calculate surplus cash at mid-year and year-end to determine the amount of surplus cash available for distribution. Questioned Costs: $60,677 Effect: The Partnership is in violation of HUD regulatory requirements governing surplus cash distributions. Cause: The timing of surplus cash. Recommendation: Management should review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement. Management?s Views: Management is in agreement with the finding. Auditors comment: CLEARED. Although distributions were made prior to year-end, repayment is not necessary as the Partnership had sufficient surplus cash at December 31, 2022.