Finding Text
1. Finding No. 2022-001: Section 232, Late Deposit of Surplus Cash Condition: A deficiency in internal control over compliance existed due to the prior year excess Surplus Cash amounts not being deposited into the residual receipts account within ninety days after the end of annual fiscal period for which Surplus Cash was calculated. Criteria: Internal controls over compliance should be in place to ensure the deposit of Surplus Cash into the residual receipts account occurs within ninety days after year end. Cause: The Company did not make a timely deposit upon receipt of the audited financial statements. This deposit was not made until correspondence was received from HUD's Real Estate Assessment Center ("REAC"). This correspondence also identified the deposit amounts required to be made to the residual receipts account. Effect: This deficiency resulted in the Company's noncompliance with the required deposit of Surplus Cash to the residual receipts account. Recommendation: The Company should adhere to internal procedures to ensure that Surplus Cash is deposited within ninety days after the end of annual fiscal period for which Surplus Cash is calculated. Views of Responsible Officials and Planned Corrective Actions: Management of Jennings Real Estate, LLC is in agreement with the finding and the auditor's recommendation to adhere to internal procedures.