Finding 496683 (2023-002)

Special Test and Provisions The residual receipt was deposited over 60 days following the end of the fiscal year. In order to ascertain whether the Project complied with the compliance requirement we examined the form “Computation of Surplus cash, distributions, and residual receipt” and determine if a residual receipt deposit is required. The deposit of this residual was made more than 60 days after the end of fiscal year. The 24 CFR Section 891.400 (e) states that any remaining project funds in the project funds account (including earned interest) following the expiration of the fiscal year shall be deposited in a Federally-insured residual receipts account within 60 days following the end of the fiscal year. Lack of personnel in the accounting department. Only one employee is in-charge of performing the accounting and the closing procedures. Consequently, when the analysis of the residual receipt was performed, the 60 days had already passed. The Project may be subject to HUD findings and therefore, may be subject to penalties.