Finding 400142 (2023-001)

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2023-001: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157. STATEMENT OF CONDITION The surplus cash calculated for the year ended December 31, 2023, is required to be deposited by the Project within 60 days after year end. CRITERIA The HUD Audit Guide considers this to be an unauthorized use of project funds. CAUSE OF CONDITION The 60-day surplus cash deposit requirement of the Regulatory Agreement was missed due to a banking oversight. EFFECT OF CONDITION The surplus cash amount of $18,172 was not deposited into the residual receipts account by February 28, 2024. RECOMMENDATION The auditor recommends depositing the surplus cash amount of $18,172 into the residual receipts account immediately. The auditor also recommends that the management company continue to monitor the 60 days after year-end deadline and transmit the funds to the residual receipts account prior to this deadline, if applicable, in future years. MANAGEMENT’S RESPONSE Management has deposited the surplus cash amount of $18,172 into the residual receipts account and will continue to monitor the 60 days after year-end deadline in the future.