Finding Text
Finding 2022-001: Deposit of Surplus Cash into a Residual Receipts Account Department of Housing and Urban Development (HUD) ? AL #14.181 Supportive Housing for Persons with Disabilities ? Capital Advance Questioned Costs: None Condition: Friendship House Apartments, Inc. had surplus cash of $30,525 on hand at September 30, 2021. Approval was obtained from HUD to utilize $25,200 of the surplus cash for heating and air conditioning units, leaving remaining surplus cash of $5,325. HUD approval was not received and the remaining surplus cash was not remitted within 90 days of year end. Criteria: The Consolidated Audit Guide for Audits of HUD Programs and the compliance requirements for AL #14.181 state that any surplus cash as calculated under HUD guidelines in the project funds account at the end of the fiscal year be deposited in a federally insured residual receipts account within 90 days following the end of the fiscal year. Cause: Friendship House Apartments, Inc. delayed remitting the surplus cash while it was waiting for approval from HUD to use the surplus cash for capital purchases. The approval was received after the 90 day remittance period. Effect: Due to the above noted condition, Friendship House Apartments, Inc. was not in compliance with this particular HUD compliance requirement. Recommendation: Friendship House Apartments, Inc. should ensure that a timely deposit is made, as required by HUD. Views of Responsible Officials: Friendship House Apartments, Inc. agrees with the audit finding and has written a correction action plan.