Finding Text
Compliance Requirement: Special Tests and Provisions
Criteria: In accordance with the Project’s regulatory agreement with HUD, management shall establish a residual receipts account and make deposits into the account in accordance with HUD requirements (within 90 days after the close of the fiscal year). Disbursements from such fund may be made only after written consent is received from HUD.
Condition: Based on the Computation of Surplus Cash, the deposit due to the residual receipts fund is $5,015. The deposit has not been made.
Cause: Management was unaware of how to calculate the amount due to the residual receipts funds.
Effect: The organization is not in compliance with this requirement.
Recommendation: To avoid potential non-compliance, we recommend that management only make deposits into the residual receipts account of surplus cash at the end of each fiscal year. The required deposit should be made within 90 days after the close of the fiscal year. Disbursements will only be made after obtaining written consent from HUD.
Management’s Response: Refer to Corrective Action Plan.