Finding Text
Agency: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.181 Program: Supportive Housing for Persons with Disabilities Criteria: HUD requires that processes and controls are implemented to ensure compliance with with HUD requirements over special tests and provisions. Condition: Management did not prepare reconciliations for a portion of the year of residual receipts and reserve for replacement accounts to ensure compliance with program requirements. Cause: Management has indicated that due to staff turnover reconciliations were not performed timely. Effect: The lack of timely reconciliations could result in inaccurate financial reporting and failed compliance with HUD requirements related to the residual receipts and reserve for replacement accounts. Questioned Costs: The amount of questioned costs cannot be determined. Context: We tested 3 of 12 months for both the reserve for replacement and the residual receipts accounts, noting 2 of the 3 months for both accounts did not have reconciliations completed timely. Recommendation: We recommend management implement timely preparation and review of all cash accounts to ensure proper amounts are deposited into the restricted accounts each year. Management's Response: The compliance oversight of the Project was maintained by the same individual from the Project's acquisition during 2016 through her retirement in 2022. Due to staffing shortages after the employee's retirement, there was a portion of the year when no review of account reconciliations of the reserve accounts were being completed and reviewed. Management has filled that position and subsequently brought the account reconciliations up-to-date.