Finding 526997 (2024-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2024

Accepted

2025-03-14

Audit: 346099

Organization: Positively Third Street Housing Development Fun Co., Inc. (NY)

Auditor: Cohnreznick LLP

AI Summary

Core Issue: The organization failed to deposit $93,641 into the residual receipts reserve within the required 90 days after year-end.
Impacted Requirements: This noncompliance with HUD regulations indicates a lack of effective internal controls.
Recommended Follow-Up: Management should implement new procedures to ensure timely deposits moving forward.

Finding Text

Federal Award Findings and Questioned Costs Finding No. 2024-1; Section 202, Assistance Listing 14.157 – Significant Deficiency Name of Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: Supportive Housing for the Elderly Section 202 Direct Loan and Project Rental Assistance Contract; 14.157 Federal Award Identification Number and Year: 012-EE287 2024 Condition During the year ended June 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $93,641 within 90 days of year end, as required by HUD. The residual receipts amount as of February 26, 2025, the Organization has not yet deposited the amount into the Residual Receipts reserve. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor's Noncompliance Code: B - Failure to make required residual receipts deposits Reporting Views of Responsible Officials The $93,461 of residual receipts noted in the 2023 audit and cited as a finding in the 2024 report was deposited into the residual receipt account on January 10, 2025. Our new Controller has established procedures to ensure that that the proceeds stemming from the retroactive budgetbased rent increase are used for their intended purpose prior to the end of the fiscal year that they are received. Status In process

Corrective Action Plan

Project Legal Name: Positively Third Street HDFC HUD Project No.: 012-EE287 Audit Firm: CohnReznick LLLP Period covered by the audit: July 1, 2023 through June 30, 2024 Corrective Action Plan prepared by: Name: Matthew LoCurto Position: CFO Telephone Number: 212-453-5257 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding 2024-1 a. Comments on the Finding and Each Recommendation Management agrees with the finding and recommendation put forth by the auditors Action(s) Taken or Planned The $93,461 of residual receipts noted in the 2023 audit and cited as a finding in the 2024 report was deposited into the residual receipt account on January 10, 2025. Our new Controller has established procedures to ensure that that the proceeds stemming from the retroactive budget based rent increase are used for their intended purpose prior to the end of the fiscal year that they are received. B. Status of Corrective Actions on Findings Reported in the Schedule of the Status of Prior Audit Findings, Questioned Costs and Recommendations N/A

Other Findings in this Audit

526998 2024-001

Significant Deficiency
1103439 2024-001

Significant Deficiency
1103440 2024-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.157	Supportive Housing for the Elderly	$991,062