Core Issue: Afiya Apartments, Inc. failed to deposit surplus cash into the residual receipts account within the required 60 days after year-end.
Impacted Requirements: This finding relates to compliance with HUD regulations regarding the timely deposit of surplus cash.
Recommended Follow-Up: Management should establish and enforce internal controls to ensure timely deposits in the future.
Finding Text
Finding 2023-003
Type of Finding: Significant deficiency in internal control over compliance immaterial noncompliance.
Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181)
Compliance Requirement: Special Tests and Provisions – Residual Receipts Account
Criteria: Afiya Apartments, Inc.’s regulatory agreement with HUD requires surplus cash to be deposited
into the residual receipts account within 60 days following year-end.
Condition: The required deposit of surplus cash was not made to the residual receipts account within 60
days following year-end as required. It was deposited late.
Cause: There were not proper internal controls in place to ensure the deposit was made timely.
Effect: The deposit was made after the required 60 days following year-end. This is considered
immaterial noncompliance.
Questioned Costs: None.
Repeat Finding: No.
Context: Not applicable.
Recommendation: We recommend management design and implement internal controls over
compliance to ensure that surplus cash is deposited to the residual receipts account within 60 days
following year-end as required by HUD.
Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Categories
HUD Housing ProgramsSpecial Tests & ProvisionsCash ManagementSignificant DeficiencyInternal Control / Segregation of Duties