Finding 44031 (2022-001)

-
Requirement
P
Questioned Costs
$1
Year
2022
Accepted
2023-02-09
Audit: 38453
Auditor: Cla

AI Summary

  • Core Issue: The Project did not deposit the full required amount of surplus cash, leading to an underfunded deposit of $15,885.
  • Impacted Requirements: Compliance with the Regulatory Agreement regarding surplus cash calculations and deposits was not met.
  • Recommended Follow-Up: Project Management should calculate surplus cash annually and ensure full deposits are made within 90 days as mandated.

Finding Text

2022-001 Federal agency: U.S. Department of Housing and Urban Development Federal program: Section 221(d)(3) Insured Mortgage Federal Assistance Listing: 14.135 Award Period: 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria of specific requirement: Surplus cash must be calculated and deposited as defined in the Regulatory Agreement. Surplus cash deposit was underfunded. Condition: The Project did not deposit the full amount of its Surplus Cash position at June 30, 2021. Deposit was underfunded as calculated and required by regulatory agreement. Calculation was $71,914 and $56,029 was deposited. Questions costs: $15,885 Context: Reporting requirements were tested for instances of noncompliance. Cause: Oversight Effect: Residual receipts reserve balance was less than required by regulatory agreement. Recommendation: We recommend that Project Management compute surplus cash on an annual basis and make full deposit within 90 days as required by regulatory agreement.

Corrective Action Plan

Flagstaff Housing Corporation ? Clark Homes CORRECTIVE ACTION PLAN YEAR ENDED JUNE 30, 2022 U.S. Department of Housing and Urban Development Flagstaff Housing Corporation - Clark Homes respectfully submits the following corrective action plan for the year ended June 30, 2022. Audit period: July 1, 2021 through June 30, 2022 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS?FINANCIAL STATEMENT AUDIT SIGNIFICANT DEFICIENCY 2022-001 Residual Receipts and Surplus Cash Deposit Recommendation: Recommend that Project Management compute surplus cash on an annual basis and make full deposit within 90 days as required by regulatory agreement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: An additional deposit will be made to the Residual Receipts account to correct the shortfall by March 1, 2023. Additional control measures have been added to ensure timely and accurate future deposits. Name(s) of the contact person(s) responsible for corrective action: Kurt Aldinger Planned completion date for corrective action plan: On going If the Department of Housing and Urban Development (HUD) has questions regarding this plan, please call Kurt Aldinger at 928-213-2736.

Categories

Questioned Costs Internal Control / Segregation of Duties Cash Management HUD Housing Programs Reporting Significant Deficiency

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.195 Section 8 Housing Assistance Payments Program $1.03M
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $787,332