Finding Text
Federal Program – Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rates – HUD Project No. 121-35963 Assistance Listing Number 14.135
Housing and Urban Development Program Year 2023–2024 Criteria or Specific Requirement – Federal Financial Reporting Condition – The Project failed to file the required audited financial statements to HUD via the Real Estate Assessment Center (REAC) portal within 90 days, as required under the Regulatory Agreement. The Project is responsible for submitting the audited financial statements and supplementary information on time, reporting all required information on its reports, and establishing internal controls to ensure such reports are submitted within federal requirements. Questioned Costs – N/A Context – The Project did not submit the required audited financial statements in accordance with the 90-day deadline under the Regulatory Agreement for its mortgage payable. The audited financial statements were not issued until 11 days after the requirement. Effect – The Project was not compliant with the 90-day audit deadline under the Regulatory Agreement for its mortgage payable. Cause – Due to staffing turnover and other changes at the Project, the audit financial statements were not submitted timely as certain items were still being completed as a part of the audit process. Identification as a Repeat Finding, if Applicable – N/A Recommendation – The Project should ensure the design and appropriate operating effectiveness of controls surrounding the annual financial statement audit to ensure they are reported and submitted within the required time frame. Views of Responsible Officials and Planned Corrective Actions – Management has moved the accounting responsibility for the Project to an established team and will ensure that the required annual audit report is issued and filed with REAC within the 90-day deadline in the future.