FAC Explorer

Finding 7550 (2023-002)

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Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-01-05
Audit: 9868
Organization: Flagship City Apartments, Inc. (PA)
Auditor: McGill Power Bell & Associates LLP

AI Summary

  • Core Issue: The Project failed to send excess residual receipts over $250 per unit to HUD by the contract renewal date.
  • Impacted Requirements: This is a violation of HUD regulations regarding the timely remittance of funds upon contract termination.
  • Recommended Follow-Up: No further action is needed since the excess funds have already been remitted to HUD.

Finding Text

Supportive Housing for Disabled Persons ALN #14.181 Statement of Condition: The Project did not remit residual receipts balances in excess of $250 per unit to HUD by the Project Rental Assistance Contract renewal date. Criteria: Pursuant to statutory language from the Consolidated and Further Continuing Appropriations Act, HUD is required to recapture residual receipt balances that are in excess of $250 per unit. The fund must be remitted to HUD upon “termination” of the Project Rental Assistance Contract. Termination is defined as expiration of the contract term, which for most PRACs falls on contract renewal date. Effect of Condition: This is a violation of the HUD Regulations. Cause of Condition: The procedures in place to ensure the excess residual receipts remittance was made timely were not consistently followed. Recommendation: No action is needed, as the required return of excess residual receipts has already been remitted to HUD. Response: See Corrective Action Plan.

Corrective Action Plan

A. Audit Finding No. 2023-01 Statement of Condition: The Project did not deposit 2022 surplus cash into residual receipts account within 60 days after the fiscal year end. Criteria: Pursuant to HUD Regulations, the Project is required to deposit surplus cash into a residual receipts account within 60 days after fiscal year end. Effect of Condition: This is a violation of the HUD Regulations. Cause of Condition: The procedures in place to ensure the surplus cash deposit was made timely were not consistently followed. Recommendation: No action is needed, as the required surplus cash deposit has already been made to the residual receipts account. Response: See Corrective Action Plan. B. Comment on Findings and Recommendations We concur with the auditors' finding that the project did not make the full residual receipts (surplus cash) deposit within 90 days of the March 31, 2022 fiscal year-end. C. Actions Taken or Planned The Director of Accounting and the Property Accountant will review and verify the balance of the project's surplus cash and ensure the residual receipts deposit is made within 90 days of the fiscal year-end in accordance with current regulations.

Categories

HUD Housing Programs Cash Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.50M
14.239 Home Investment Partnerships Program $290,750
14.182 Section 8 New Construction and Substantial Rehabilitation $57,498