Finding Text
Department of Housing and Urban Development Finding 2022-001 Section 223(f) Mortgage Insurance Program, AL 14.155 Statement of Condition For the year ended September 30, 2021, management did not make the required residual receipts reserve deposit in the amount of $109,025 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on February 11, 2022. Criteria Residual receipts reserve deposits should be made within 90 days of year end. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect The Project is not in compliance with the requirements of the Regulatory Agreement. 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 deposits (REAC); N - Special tests and provisions (UG) Finding Resolution Status: Resolved. Management is working to get the audit done in a more timely manner so that the calculation for residual receipts can be completed in time to make any necessary deposits within the required deadline. The intent is to begin the FY 23 audit prior to fiscal year end to allow for customary preliminary audit work. Reporting Views of Responsible Officials On February 11, 2022, the Project remitted the funds to HUD.