Residual Receipts & Surplus Cash
WHEN DO YOU ENCOUNTER A NEED TO HAVE RESIDUAL RECEIPTS OR SURPLUS CASH?
This necessity may appear during the project’s annual audit, but depending on the timing of the audit it may be too late. HUD requires the surplus cash to be deposited into the residual receipts account no later than 90 days following the project’s year-end or sooner depending on the regulatory agreement.
According to HUD, the residual receipts account should be invested in interest earning accounts with care taken to preserve sufficient liquidity. These residual receipts accounts require HUD approval prior to disbursement. Some approved uses of the residual receipts account include, but are not limited to, reducing operating deficits when legitimate cash flow deficiencies exist, making repairs to the property not covered by the reserve for replacements and providing certain additional property amenities.
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