Finding Text
2024 – 001
Federal Agency: Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: N/A
Type of Finding:
*Material Weakness in Internal Control over Compliance and Other Matters
Criteria or specific requirement: Owners are required to establish and maintain a separate project
account in federally insured depository. All rents, charges, income, and revenues arising from the
project operation shall be deposited into this account. Project funds must be used for the operation of
the project (including required insurance coverage), and to make required deposits to replacement
reserve and the residual receipts accounts (24 CFR section 891.400(e)).
Condition: It was observed that rent deposits were not being processed through the Sunrise Bank
Lockbox (implemented in January of 2024) to the correct entity's operating account. Additionally, in
January through September of 2024, the activity was not being transferred to Home Share in a timely
manner and there is no proof that the bank reconciliation is being reviewed.
Questioned costs: N/A
Context: The project is required to maintain a separate account for all project-related income and
expenses to ensure proper financial management and compliance with federal regulations. This account should be used exclusively for project operations, including required insurance coverage and
deposits to replacement reserve and residual receipts accounts. Additionally, there should be controls
in place to ensure these are being properly recorded.
Cause: The process for handling rent deposits in January through September of 2024 was not aligned
with the established criteria. This misalignment was due to the onboarding of Remit Plus (lockbox
company for Sunrise Bank). Accord can only have one lockbox where all checks are sent, including
rent for Home Share. Despite having a separate project in Remit Plus for Home Share, not all checks
were properly deposited into the company’s operating account, but rather into Accord’s operating
account. In Q1-Q3, timely transfer of Home Share funds did not occur. Once Accord identified the
issue, timely transfers begin in Q4.
Effect: Failure to deposit rent income into the correct operating account and delay in transferring
activity to Home Share can lead to financial discrepancies, mismanagement of project funds, and noncompliance with federal regulations. This can ultimately affect the project's ability to meet operational and regulatory requirements.
Repeat Finding: No
Recommendation: It is recommended that the Project continue to monitor the deposit of Home Share funds into Accord’s operating account & transfer the funds in a timely manner. In addition, a review of the bank reconciliation should be documented to support that the deposits were reviewed and transferred timely.
Views of responsible officials: There is no disagreement with the audit findings.
Management Response: We have taken corrective action to ensure that funds are transferred to the
appropriate account in a timely manner and have strengthened our review procedures to confirm
compliance. We are actively working with Remit Plus & Sunrise Bank to prevent future delays and
ensure ongoing compliance with federal regulations.