Finding Text
Finding 2022-001: U.S. Department of Housing and Urban Development, Supportive Housing for the Elderly, Assistance Listing #14.157 Statement of Condition: At December 31, 2022, the Project had $17,523 of funds maintained in an institution that were in excess of FDIC insured limits. Criteria: The HUD Handbook 4370.2, Chapter 2, Section 2-5, requires that the cash accounts of the Project be deposited in a bank or banks whose deposits are federally insured. Effect: Noncompliance with HUD Regulations and potential loss of the funds held in excess of FDIC limits. Cause: Management did not transfer funds to separate financial institutions in a timely manner to provide for continuous FDIC insurance coverage. Context: A test to compare the total funds held at each institution to the $250,000 federally insured limit. At December 31, 2022, the total funds held at one bank was $267,523 which was $17,253 in excess of the $250,000 federally insured limit. Questioned Costs: $0 Recommendation: We recommend that management should continuously monitor cash balances to ensure that funds are always covered by FDIC insurance limits, collateral agreements are obtained, or funds are invested in government securities. Views of Responsible Officials and Corrective Action Plan: Management agrees with the above finding and will transfer funds to provide adequate FDIC insurance coverage for all funds. Management will re-evaluate its policies and procedures to determine any necessary changes.