Finding Text
Criteria or Specific Requirement ? Special Tests and Provisions: Residual Receipts Account (24 CFR 891.400(e) and 891.600(e)) Condition ? The required annual deposit to the residual receipts account was not made. This deposit is required to be made within 60 days following year-end. Questioned Costs ? None. Context ? The Project is required to calculate surplus cash at the end of each fiscal year and any amount greater than zero is required to be deposited to a federally insured residual receipts account within 60 days of year-end. The Project properly calculated surplus cash for fiscal year 2021; however, funds were not deposited into the residual receipts account. Effect ? The Project did not comply with the residual receipts compliance requirement. Cause ? Fiscal year 2021 was the second year the Project had surplus cash that was required to be deposited to the residual receipts account and management was dependent on HUD to communicate surplus cash. Identification as a Repeat Finding ? No. Recommendation ? Management should create policies and procedures to identify and transfer surplus cash to the residual receipts account to ensure compliance with this requirement. View of Responsible Officials and Planned Corrective Actions ? Surplus cash is calculated on a monthly basis. All residual receipts are required to be deposited in a separate federally insured account within 60 days of the fiscal year-end. Written instructions are included on the surplus cash calculation spreadsheet to ensure compliance.