Finding Text
Department of Housing and Urban Development Finding 2022-001 Section 202 Supportive Housing for the Elderly, AL 14.157 Statement of Condition The Organization failed to make deposit to residual receipts reserve within 90 days after September 30, 2021. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Questioned Costs $1,474 Effect The Organization is not in compliance with the requirements of the regulatory agreement. Cause Management did not have procedures in place to ensure HUD rules were followed while they were in the process of transitioning the property to the buyer. Recommendation Property was sold on January 12, 2022 and the reserve was transferred to buyer. Management should discuss with HUD whether a payment should be made to HUD or the buyer. Auditor Noncompliance Code: B. Failure to make required residual receipts deposits; N. Special Tests and Provisions (UG) Finding Resolution Status: Unresolved. As the property has been sold, management plans to contact HUD to determine the appropriate handling of this situation. Reporting Views of Responsible Officials Management agrees with the finding. The property was sold subsequent to year end and the reserve was transferred to the buyer. We will inquire of HUD what they want us to do regarding the missing deposit.