Finding Text
Funds were withdrawn from the reserve for replacements account; however, these funds were intended to be withdrawn from the residual receipts account to repay HUD for excess funds in the residual receipts account.
Criteria. Excess residual receipts funds, should be withdrawn from the residual receipts account, not the reserve for replacements account.
Cause. Management intended to request excess funds to be withdrawn from the residual receipts account to repay HUD; however, they incorrectly requested that these funds be withdrawn from the reserve for replacements account.
Effect. The withdrawal of $45,458 from the reserve for replacements account was deposited into the corporation's operating checking account.
Recommendation. We recommend that $45,458 be deposited into the reserve for replacements account.
Management Response. Management will request the necessary transfer be made from the operating account to the reserve for replacements account to correct errors in the fund requesting process. Checks will be put in place to ensure that fund requests are filled out appropriately going forward.