Finding Text
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Finding No. 2022-1: Finding Resolution Status: Ongoing Information on Universe Population: Not applicable Statement of Condition: Management distributed funds before surplus cash was demonstrated at the end of the annual and semi-annual fiscal periods. Criteria: In accordance with HUD guidelines and requirements regarding the Section 232 Insured Mortgage, distributions may only be made after the end of any annual or semi-annual fiscal period, and when positive surplus cash is demonstrated. Effect: Noncompliance with HUD program guidelines. Cause: Management did not follow the established policies or HUD regulations because of the timing of when they believed surplus cash was available. Recommendation: We recommend that management review the regulatory agreement of how surplus cash is calculated and timing of when a distribution is allowed. Management should ensure if net positive surplus is calculated it is only distributed at annual or semi-annual intervals. Auditor non-compliance code: Z - Other Amount of questioned costs: $129,000.00 Reporting views of responsible officials: Management has reviewed the loan requirements and will ensure that excess cash will not be pulled from the Project except as allowed under the Section 232 guidelines and at annual or semi-annual intervals. Concur or Do Not Concur with this finding: Concur Auditor's summary of the auditee's comments on the findings Management has reviewed the loan requirements and will ensure that excess cash will not be pulled from the Project except as allowed under the Section 232 guidelines and at annual or semi-annual intervals.