Finding 9230 (2021-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2021
Accepted
2024-01-21

AI Summary

  • Core Issue: The Project did not deposit surplus cash into the residual receipts account within the required 90 days after year-end.
  • Impacted Requirements: This failure violates HUD’s guidelines and the Company’s Regulatory Agreement.
  • Recommended Follow-Up: Implement procedures to ensure timely calculation and transfer of residual receipts within the 90-day timeframe.

Finding Text

Finding No. 2021-002 (Significant Deficiency) Condition The Project failed to deposit current year’s surplus cash into its residual receipts account within 90 days of year-end. Criteria The Company is required to follow HUD’s guidelines and procedures for depositing surplus cash into a residual receipts account within 90 days after the end of the fiscal period. Cause Management of the Company did not complete the calculation within the 90-day period as required. Effect The Company was not in compliance with their Regulatory Agreement. Context During our audit procedure for the computation of surplus cash, we recalculated the amounts in the schedule and noted the schedule to be accurate. However, while completing our audit procedure to review the transfer into the surplus cash account prior to the 90-day deadline, we noted the transfer was not made. Recommendation The Company should ensure their procedures require the calculation of residual receipts and the transfer occur within 90 days of year-end. Reporting Views of Responsible Officials Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on December 2, 2021.

Corrective Action Plan

Management has acknowledged a breach in protocol and deposited the current year’s surplus cash on December 2, 2021.

Categories

HUD Housing Programs Cash Management Reporting Significant Deficiency

Other Findings in this Audit

  • 9231 2021-003
    Significant Deficiency Repeat
  • 9232 2021-003
    Significant Deficiency Repeat
  • 9233 2021-002
    Significant Deficiency
  • 585672 2021-002
    Significant Deficiency
  • 585673 2021-003
    Significant Deficiency Repeat
  • 585674 2021-003
    Significant Deficiency Repeat
  • 585675 2021-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $4.63M
14.195 Section 8 Housing Assistance Payments Program $2.77M