Finding Text
Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155
Criteria: St. Luke Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end.
Condition: The required deposit of $4,419 for the year ended September 30, 2022 was not made within the 60 day timeline.
Context: We reviewed the residual receipts deposits during the year.
Cause: St. Luke Apartments’ surplus cash was not performed timely.
Effect: St. Luke Apartments is not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve.
Recommendation: St. Luke Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement.
Views of management and planned corrective action: St. Luke Apartments agrees with the finding and the required payment was made after the 60-day timeline.