Finding 583743 (2023-006)

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Requirement
P
Questioned Costs
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Year
2023
Accepted
2024-01-04

AI Summary

  • Issue: A bank account holding residual receipts was closed without HUD's authorization, and $524 was improperly transferred to the operating account.
  • Requirements Impacted: This action violates the regulatory agreement, which mandates that residual receipts must be controlled by HUD.
  • Follow-Up: Transfer the $524 back to the residual receipts account and ensure future transactions comply with HUD approval.

Finding Text

One of the residual receipts bank accounts maintained by the corporation was closed and the balance of $524 was deposited into the operating checking account. Closure of this account was not authorized by HUD. Criteria. Paragraph 2c of the regulatory agreement states in part, "Residual receipts shall be under the control of the Secretary, and shall be disbursed only on the direction of the Secretary." Cause. Unknown. Effect. The residual receipts transfer of funds to the operating account is a violation of the regulatory agreement. Recommendation. We recommend that $524 be transferred to the residual receipts account that is maintained at the mortgage company and that only withdrawals from this account be made with the approval of HUD. Management Response. Management will request the $524 transfer be made from the operating account to the residual receipts account. Due diligence will be performed in the future to ensure improper account closures as well as improper transfers of monies are not made.

Categories

HUD Housing Programs Cash Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.155 Hud-Insured Mortgage $4.37M
14.195 Section 8 $636,702
21.027 Coronavirus State and Local Fiscal Recovery Funds $5,586