Finding Text
One of the residual receipts bank accounts maintained by the corporation was closed and the balance of $524 was deposited into the operating checking account. Closure of this account was not authorized by HUD.
Criteria. Paragraph 2c of the regulatory agreement states in part, "Residual receipts shall be under the control of the Secretary, and shall be disbursed only on the direction of the Secretary."
Cause. Unknown.
Effect. The residual receipts transfer of funds to the operating account is a violation of the regulatory agreement.
Recommendation. We recommend that $524 be transferred to the residual receipts account that is maintained at the mortgage company and that only withdrawals from this account be made with the approval of HUD.
Management Response. Management will request the $524 transfer be made from the operating account to the residual receipts account. Due diligence will be performed in the future to ensure improper account closures as well as improper transfers of monies are not made.