Finding Text
Department of Housing and Urban Development Finding 2022-001 Section 223(a)(7) Mortgage Insurance Program, AL 14.155 Statement of Condition During the year ended September 30, 2022, management did not make the full required residual receipts reserve deposit in the amount of $9,123 within 90 days of year end, as required by HUD. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Effect The Organization is not in compliance with the requirements of the regulatory agreement. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. The deposit amount was revised upwards based on the final audited financial statements and management did not realize the deposit amount had been increased from original estimates. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B. Failure to make required residual receipts deposit (REAC); N- Special Tests and Provisions (UG) Finding Resolution Status: Resolved Reporting Views of Responsible Officials Management did not make the required deposit timely as the fiscal year 2021 audit was so delayed that the calculation wasn't finalized in time to make the correct deposit amount prior to the December 2021 deadline. The initially calculated amount was deposited timely. The updated amount wasn't provided until June 2022. The amount was deposited on September 27, 2022. Management is working to get the fiscal year 2022 audit done in a more-timely manner.