Finding Text
Condition - The residual receipts account was not maintained by management and is underfunded by $29,285 at June 30, 2023.
Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157 - Supportive Housing for the Elderly, non-profit owners and owners of limited distribution projects shall establish a residual receipts account and make required deposits into the account within 90 days after the close of the fiscal year.
Effect - The Company was not in compliance with the above HUD regulations.
Cause - The residual receipts account was closed during the management agent transfer process and a new account was not opened resulting in the prior year ending balance of $9,288 and prior year surplus cash of $19,997 totaling $29,285 not being deposited into the account.
Recommendation - We recommend that a residual receipts account be opened and the delinquent deposit totaling $29,285 at June 30, 2023 be deposited into the residual receipts account as soon as possible.
Management's Reply - (a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation, please see below for action taken.
(b) Action taken: Management opened a residual receipts account on October 17, 2023 and have deposited the prior year balance at June 30, 2022 of $9,288. The prior year surplus cash amount of $19,997 will be deposited in the residual receipts account by January 5, 2024.