Finding Text
2024 – 001
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Section 223(f) Mortgage Insurance for the Purchase or Refinance of Existing Multi-Family Housing Units
Assistance Listing Number: 14.155
Federal Award Identification Number and Year: 075-11186 - 2024
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and immaterial noncompliance.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of regulatory agreement. Trinity Terrace, Inc., should have internal controls designed to ensure compliance with those provisions.
Condition: During our testing, we noted that Trinity Terrace, Inc., did not have adequate internal controls designed to ensure replacement reserve deposits were updated based on the provisions of the regulatory agreement.
Questioned costs: $315
Context: During our testing, it was noted that Trinity Terrace, Inc., did not update the October and November 2024 replacement reserve deposits as prescribed in the regulatory agreement.
Cause: Trinity Terrace, Inc., was unaware the bank did not update the October and November 2024 replacement reserve deposits.
Effect: Noncompliance with the HUD regulatory agreement.
Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are updated timely to ensure compliance with the HUD regulatory agreement.
Views of responsible officials: There is no disagreement with the audit finding.