Finding 46555 (2022-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-02-27

AI Summary

  • Core Issue: The required residual receipts reserve deposit of $9,123 was not made within the 90-day deadline after year-end.
  • Impacted Requirements: This noncompliance with HUD regulations affects the organization's adherence to the regulatory agreement.
  • Recommended Follow-Up: Management should implement internal controls to ensure timely deposits in the future and expedite audit processes.

Finding Text

Department of Housing and Urban Development Finding 2022-001 Section 223(a)(7) Mortgage Insurance Program, AL 14.155 Statement of Condition During the year ended September 30, 2022, management did not make the full required residual receipts reserve deposit in the amount of $9,123 within 90 days of year end, as required by HUD. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Effect The Organization is not in compliance with the requirements of the regulatory agreement. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. The deposit amount was revised upwards based on the final audited financial statements and management did not realize the deposit amount had been increased from original estimates. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B. Failure to make required residual receipts deposit (REAC); N- Special Tests and Provisions (UG) Finding Resolution Status: Resolved Reporting Views of Responsible Officials Management did not make the required deposit timely as the fiscal year 2021 audit was so delayed that the calculation wasn't finalized in time to make the correct deposit amount prior to the December 2021 deadline. The initially calculated amount was deposited timely. The updated amount wasn't provided until June 2022. The amount was deposited on September 27, 2022. Management is working to get the fiscal year 2022 audit done in a more-timely manner.

Corrective Action Plan

CORRECTIVE ACTION PLAN Project Legal Name: The Salvation Army William Booth Towers Atlanta, GA (? Project of Booth Residence, Inc., a Georgia Corporation) HUD Project No.: 061-11293 Audit Firm: CohnReznick LLP Period covered by the audit: 10/1/2021-9/30/2022 Corrective Action Plan prepared by: Name: Sriparna Mitra Position: HUD Specialist, THQ (Legal) Telephone Number: 404-728-6700 A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding 2022-001 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation to ensure that required residual receipts reserve deposits and any audit adjustments based on revised numbers are made timely. b. Action(s) Taken or Planned on the Finding Management did not make the required deposit timely as the fiscal year 2021 audit was so delayed that the calculation wasn't finalized in time to make the correct deposit amount prior to the December 2021 deadline. The initially calculated amount was deposited timely. The updated amount wasn't provided until June 2022. The additional amount owed was deposited on September 27, 2022. Management is working to get the fiscal year 2022 audit done in a more timely manner. B. Status of Corrective Actions on Findings Reported in the Schedule of the Status of Prior Year Findings, Questioned Costs and Recommendations 1. Finding 2021-001 Cleared.

Categories

HUD Housing Programs Reporting Special Tests & Provisions Internal Control / Segregation of Duties

Other Findings in this Audit

  • 622997 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.90M
14.195 Section 8 Housing Assistance Payments Program $867,486