Finding Text
FINDING NUMBER 2023-001: CASH BALANCES IN FINANCIAL INSTITUTIONS IN EXCESS OF FEDERAL INSURANCE LIMITS
Finding Resolution Status: - In Process
Information on Universe Population Size: - Not applicable
Sample Size Information: - Not applicable
Noncompliance Information: - Cash balances in project operating bank accounts are in financial institutions in excess of federal insurance limits
Statement of Condition: - HUD requires that the Company maintain cash balances in financial institutions that are covered by insurance issued by the Federal Deposit Insurance Corporation (FDIC). The Company may maintain cash balances in financial institution in excess of the FDIC insurance limit if the Company verifies the bank’s debt rating meets certain requirements.
Criteria: - As of March 31, 2023 the operating cash balances in excess of the amount allowed by HUD is $236,589.
Effect: - The Company has cash balances in excess of the amounts allowed by HUD. The $236,589 amount in excess of the FDIC limit is less than the surplus cash at the end of the year.
Cause: - The Company accumulated excess cash in the operating account.
Recommendation: - The Company should monitor the investments held by these financial institutions to ensure that HUD’s requirements are met.
Non-compliance code: - Z – Other.
Amount of Questioned Costs: - None