Finding 501192 (2023-003)

• Identification of the federal program AL #14.181, Department of Housing and Urban Development, Section 811 Capital Advance 2015 • Criteria The compliance supplement states that "Surplus cash available at the end of the annual reporting period is to be deposited into a Residual Receipts account within sixty (60) days. Surplus cash is determined by completion of a Computation of Surplus Cash. (Chapter 2 of HUD Handbook 4370.2, Financial Operations and Accounting Procedures for Insured Multifamily Projects.) Withdrawals from this account require HUD approval." • Condition As of the audit issuance date, the December 31, 2023 the computed surplus cash amount has not been deposited into a residual receipts reserve. • Cause The Project did not calculate the surplus cash timely in order to determine the amount which should have been deposited into a residual receipts account. • Effect or potential effect The Project is not in compliance with the requirements set forth by HUD related to its cash surplus. • Questioned costs None • Identification as a repeat finding This is not a repeat finding. • Recommendation The Project should deposit the cash surplus amount into the residual receipts account. • Views of responsible officials The Organization’s agrees with this finding and has implemented additional accounting policies and procedures, as well as staffing changes, in order to correct these issues. See the response included in the Corrective Action Plan.