Finding 485725 (2023-001)

Criteria - Special Tests and Provisions Effective January 1, 2023, Victory Heights changed from a fiscal year end of June 30 to December 31. The prior period audit report, dated October 31, 2023, represents a six-month fiscal transition period from July 1, 2022 through December 31, 2022. Any required residual receipts reserve deposits should be made on or before October 31, 2023. Condition During the year ended December 31, 2023, management did not make the required residual receipts reserve deposit in the amount of $19,656, as required by HUD. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. In addition, operating cash was insufficient to fund the reserve as of October 31, 2023. Effect or Potential Effect Victory Heights is not in compliance with the requirements of the regulatory agreement. Questioned Costs None Context Isolated instance Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. In addition, management should withdrawal $19,656 from operating cash and immediately deposit this amount into the residual receipts account. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits Finding Resolution Status: In-Process Views of Responsible Officials Going forward, management will ensure that any shortage is funded on time even if operating funds are short and we have to request funds from ownership.