Finding Text
FINDING #2023-003 RESIDUAL RECEIPTS DEPOSIT
Type of Finding: Compliance: Special Tests
Program: The Federal Programs are Section 811 Capital Advance (Assistance Listing 14.181) and Section 8 Housing Assistance Payments (Assistance Listing 14.195) issued by the U.S. Department of Housing and Urban Development.
Condition: At December 31, 2023, the Entity was short on the required residual receipts deposit in the amount of $13,894.
Criteria: The Regulatory Agreement between the Entity and HUD requires the Entity to establish and maintain a residual receipts account. The agreement requires the owners to deposit surplus cash (residual receipts) into this account within 90 days after the end of the annual fiscal period within which it was generated.
Effect: The Entity is in direct violation of the HUD Regulatory Agreement.
Cause: This was an oversight by the management agent.
Recommendation: The management agent should compute an estimate of surplus cash (residual receipts) for the fiscal year upon completion of that period. In the event that surplus cash exists at the completion of the fiscal period, the management agent must further ensure that all required deposits are made to the
residual receipts account within the required time frame and that the balance in that account meets the minimum required balance in accordance with the regulatory agreement between the Entity and HUD.
Views of Responsible Officials and Planned Corrective Action: The management agent agrees with the finding and the auditor’s recommendations have been adopted. Surplus cash will be calculated upon the completion of an annual fiscal period. If it is concluded that surplus cash exists at the end of the annual fiscal period, and further determined that the surplus cash was received within that fiscal period, that amount of surplus cash will be deposited into the Residual Receipts Account within ninety days of the close of that fiscal period.
This finding has been repeated since the December 31, 2021 audit. Prior year finding number #2022-003.