Finding Text
Criteria: Per HUD Handbook 4370.2 TEV-1, Financial Operations and Accounting Procedures for Insured Multifamily Projects 2-8 Surplus Cash and Residual Receipts E, “Funds may be released from the residual receipts funds only with prior written approval from HUD. HUD has the authority to approve, modify, or reject the owner’s proposed usage for residual receipts.”
Condition: During our testing of Residual Receipts, the Project cannot provide Form HUD-9250 Fund Authorization noting HUD’s approval of the withdrawal for the Residual Receipts account. The following are the unsupported withdrawals from the Residual Receipts account, totaling $55,412.95
Cause: The Project did not follow the HUD directive regarding proper procedures for withdrawing funds from the Residual Receipts account.
Effect: The Project ‘s Residual Receipts are not in compliance with HUD’s directive.
Recommendation: For the Residual Receipts withdrawals, we recommend that Project provide the supporting request in writing with support invoices attached to Form HUD-9250 Fund Authorization to obtain approval from HUD.
Views of Responsible Officials and Corrective Action Plan: No disagreements with the audit finding.