Finding 5640 (2023-001)

- Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-12-19

AI Summary

  • Core Issue: Pompei North Apartments missed the deadline for transferring surplus cash to the residual receipts account.
  • Impacted Requirements: The transfer must occur within 60 days of the fiscal year-end to comply with HUD regulations.
  • Recommended Follow-Up: Ensure future deposits are made on time to meet the HUD Regulatory Agreement requirements.

Finding Text

Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Pompei North Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end. Condition: The required deposit of $53,845 for the year ended March 31, 2022 was made four days after the 60 day deadline. Context: We reviewed the residual receipts deposits during the year. Cause: Pompei North Apartments’ surplus cash was not performed timely. Effect: Pompei North Apartments is not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: Pompei North Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: Pompei North Apartments agrees with the finding and the auditor’s recommendations have been adopted.

Corrective Action Plan

U.S. Department of Housing and Urban Development Pompei Housing Development Fund Company, Inc. (Pompei North Apartments), HUD Project No. 014-11249 respectfully submits the following corrective action plan for the year ended March 31, 2023. Name and address of independent public accounting firm: Bonadio & Co., LLP, 432 North Franklin Street #60, Syracuse, New York 13204 Audit period: April 1, 2022 – March 31, 2023 The finding from the 2023 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS – FINANCIAL STATEMENT AUDIT None FINDINGS – FEDERAL AWARD PROGRAM AUDIT Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Condition: The required deposit of $53,845 for the year ended March 31, 2022 was made after the 60 day deadline. Recommendation: Pompei North Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Action Taken: The required deposit was made in October 2022. Completion Date: October 2022 Name of Contact Person Responsible for Corrective Action: Kyle Lyskawa, CFO, (315) 424-1821.

Categories

HUD Housing Programs Procurement, Suspension & Debarment

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $1.46M
14.195 Section 8 Housing Assistance Payments Program $445,699