Golden Ridge Housing Inc.

Finding 2025-001: Failure to Establish and Fund Residual Receipts Account Condition: The Corporation reported surplus cash of $5,822 for the year ended December 31, 2024. However, as of December 31, 2025, the Corporation had not established or deposited these funds into a residual receipts account, as required by the HUD Regulatory Agreement. Criteria: The HUD Regulatory Agreement requires that any surplus cash determined at fiscal yearend be deposited into a residual receipts account within 60 days of the year end in which the surplus is calculated. Cause: Management did not deposit the required funds within the timeframe prescribed by the HUD Regulatory Agreement. This appears to be due to the limited cash availability. Management prioritized available cash for operating obligations and did not timely notify HUD or request guidance regarding the delayed residual receipts funding. Effect: Failure to timely establish and fund the residual receipts account, notify HUD, or request guidance results in noncompliance with the HUD Regulatory Agreement. Continued noncompliance may subject the Corporation to increased HUD oversight, required corrective actions, or potential sanctions, and could impact the Corporation’s standing with HUD. Recommendation: We recommend that management notify HUD of the untimely residual receipts deposit and the Corporation’s current cash constraints, and request guidance on the appropriate corrective action, including approval of a late deposit or an alternative arrangement. Management should ensure that any required residual receipts are deposited in accordance with HUD’s direction and should implement procedures to annually calculate surplus cash and ensure timely residual receipts funding or documented HUD approval when exceptions arise. The surplus cash for the year ended December 31, 2025 has a negative surplus cash of $19,774, which helps validate the 2024 surplus cash was needed in 2025 for operations. Response: Management acknowledges that the residual receipts account was not funded within HUD’s required timeframe due to limited cash availability needed for operations; management will notify HUD, request guidance, and ensure timely funding or documented HUD approval going forward.

Federal program - Section 202: Criteria - Federal regulations require the Corporation to deposit a specific amount to the replacement reserve every month; Condition - total deposits exceeded the amounts authorized by $318; Cause - management made a mathematical error; Recommendation - the next deposit should be reduced for the excess funds transferred and future deposits should be based on the authorized reserve deposit of $1,602. Response: Management will make the corrections suggested.

Federal program - Section 202: Criteria - The subsidy due for every tenant should be based on the current approved rents less the tenant share; Condition - the property received a rent increase in May 2023 but did not change the subsidy for those units no longer entitled to it for the periods May through December 2023 and totaling $1,020; Cause - management oversight; Recommendation - management should retroactively correct the error in the next subsidy requisition. Response: management has corrected the error in the January 2024 requisition.

Federal program - Section 202: Criteria - Federal regulations require the Corporation to deposit a specific amount to the replacement reserve every month; Condition - deposits for the months of May through November were not made until December and the deposits were fully funded; Cause - the property was experiencing cash flow issues and could not afford to fund the monthly deposits until December; Recommendation - in the future the deposits should be made on a monthly basis. Response: Management will continue to strive to make the required monthly deposits in the future.

Federal program - Section 202: Criteria - Authorized interim loans from the replacement reserve are to be repaid when the HUD subsidy is received; Condition - during May, the property borrowed $7,558 from the replacement reserve in anticipation of receiving a late subsidy for the month and upon receipt of those subsidy funds, the loan was to be repaid; Cause - management oversight; Recommendation - management should repay the funds loaned from the replacement reserve. Response: Management will transfer operating funds to the reserve to repay the advance.