FAC Explorer

Finding 571015 (2024-001)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2024
Accepted
2025-07-11
Audit: 361975
Organization: Mrc Crestview Terrace (TX)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: There was a significant deficiency in internal control over compliance due to a surplus cash payment being deposited into the wrong account.
  • Impacted Requirement: Surplus cash payments must be made to the residual receipts account, not the reserve for replacement account.
  • Recommended Follow-Up: Management should verify payment accounts to prevent future errors; they have already corrected the mistake by transferring the funds.

Finding Text

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Surplus cash payments must be made to the residual receipts account. Condition: The Project made the 2024 surplus cash payment to the reserve for replacement account instead of the residual receipts account. Questioned costs: $38,536 Context: During the audit, it was determined that the Project deposited the 2024 surplus cash payment into the wrong account. Cause: Management oversight. Effect: The 2024 surplus cash deposit was made into the reserve for replacement account instead of the residual receipts account. Repeat finding: No Recommendation: We recommend that management check which accounts it is making payments to. Views of responsible officials: Management agrees. Subsequent to year-end, the 2024 surplus cash payment was transferred to the residual receipt account.

Corrective Action Plan

2024-001 Surplus Cash Payments Recommendation: We recommend management implement a control to ensure the surplus cash payments are deposited into the correct account and in accordance with the Regulatory Agreement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management transferred the funds to the correct account and implemented additional procedures to review monthly deposits, ensuring this issue is prevented in the future. Name(s) of the contact person(s) responsible for corrective action: Don Stephens and Michelle Miles. Planned completion date for corrective action plan: As of April 2025, Management is working with their lender, Lument, to have the surplus cash payment transferred from the Reserve for Replacement account to the Residual Receipts account.

Categories

Questioned Costs Internal Control / Segregation of Duties Cash Management HUD Housing Programs Significant Deficiency

Other Findings in this Audit

  • 1147457 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.38M
14.195 Project-Based Rental Assistance (pbra) $1.16M
14.191 Multifamily Housing Service Coordinators $41,810