Finding Text
Statement of Condition: At December 31, 2022, the Project had $51,466 of funds maintained in an institution that were in excess of FDIC insured limits. Criteria: The HUD Handbook 4370.2, Chapter 2, requires that the cash accounts of the Project be deposited in a bank or banks whose deposits are federally insured. Cause of Condition: Management did not transfer funds to separate financial institutions in a timely manner to provide for continuous FDIC insurance coverage. Effect of Condition: Noncompliance with HUD requirements and risk of loss of the Organizations' funds. 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 $301,466 which was $51,466 in excess of the $250,000 federally insured limit. Recommendation: The Organization 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. Questioned Costs: N/A Information based on Universe and Population Size: The finding noted above was not a result of sampling. Sample Size Information: The finding noted above was not a result of sampling. Noncompliance Information: The finding noted above was not a result of sampling. View's of Responsible Officials and Corrective Action Plan: Management agrees with the above finding and is in the process of transferring funds to provide adequate FDIC insurance coverage for all funds. Management will re-evaluate its policies and procedures to determine any necessary changes.