Audit 23757

Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157 - Supportive Housing for the Elderly, all requests for withdrawals from the reserve for replacements account must be approved by HUD before the funds can be transferred to the operating account. Condition - The Corporation withdrew $82,326 from the reserve for replacement account in 2021 for the replacement of the roof without the approval of HUD. Cause - There were delays in getting a response from the appropriate HUD officials in order to obtain the approval and the contractor was demanding payment. Effect - Funds were improperly withdrawn from the reserve for replacements account and transferred to the operating account without the approval of HUD. Questioned Costs - None identified. Recommendation - The Corporation should continue to work with HUD to seek approval for this withdrawal and assure that all future withdrawals from the reserve for replacements account have HUD approval. Management?s Response - Management is aware of the terms of the regulatory agreement between the Corporation and HUD dated December 22, 2004. Management also considers its role of protecting the health and safety of the residents as well as protecting the building from further damage to be of the upmost importance. That being said, management assessed the overall roof conditions and considered the safety of the residents, the continued damage being done to the building, and the lack of response from HUD. Management then proceeded to temporarily relocate various residents and authorized the roof replacement, deeming it an emergency. It should be noted that the roof replacement work item was on the HUD approved Capital Improvement Schedule. Management will continue to work with HUD to obtain the necessary approvals and expects to have this situation resolved by December 31, 2023. Additionally, management will strive to obtain all future required approvals from HUD for eligible capital improvements items while at the same time protecting the integrity of the building and safeguarding health and safety of the residents.

Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157 - Supportive Housing for the Elderly, all requests for withdrawals from the reserve for replacements account must be approved by HUD before the funds can be transferred to the operating account. Condition - The Corporation withdrew $82,326 from the reserve for replacement account in 2021 for the replacement of the roof without the approval of HUD. Cause - There were delays in getting a response from the appropriate HUD officials in order to obtain the approval and the contractor was demanding payment. Effect - Funds were improperly withdrawn from the reserve for replacements account and transferred to the operating account without the approval of HUD. Questioned Costs - None identified. Recommendation - The Corporation should continue to work with HUD to seek approval for this withdrawal and assure that all future withdrawals from the reserve for replacements account have HUD approval. Management?s Response - Management is aware of the terms of the regulatory agreement between the Corporation and HUD dated December 22, 2004. Management also considers its role of protecting the health and safety of the residents as well as protecting the building from further damage to be of the upmost importance. That being said, management assessed the overall roof conditions and considered the safety of the residents, the continued damage being done to the building, and the lack of response from HUD. Management then proceeded to temporarily relocate various residents and authorized the roof replacement, deeming it an emergency. It should be noted that the roof replacement work item was on the HUD approved Capital Improvement Schedule. Management will continue to work with HUD to obtain the necessary approvals and expects to have this situation resolved by December 31, 2023. Additionally, management will strive to obtain all future required approvals from HUD for eligible capital improvements items while at the same time protecting the integrity of the building and safeguarding health and safety of the residents.

Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157 - Supportive Housing for the Elderly, all requests for withdrawals from the reserve for replacements account must be approved by HUD before the funds can be transferred to the operating account. Condition - The Corporation withdrew $82,326 from the reserve for replacement account in 2021 for the replacement of the roof without the approval of HUD. Cause - There were delays in getting a response from the appropriate HUD officials in order to obtain the approval and the contractor was demanding payment. Effect - Funds were improperly withdrawn from the reserve for replacements account and transferred to the operating account without the approval of HUD. Questioned Costs - None identified. Recommendation - The Corporation should continue to work with HUD to seek approval for this withdrawal and assure that all future withdrawals from the reserve for replacements account have HUD approval. Management?s Response - Management is aware of the terms of the regulatory agreement between the Corporation and HUD dated December 22, 2004. Management also considers its role of protecting the health and safety of the residents as well as protecting the building from further damage to be of the upmost importance. That being said, management assessed the overall roof conditions and considered the safety of the residents, the continued damage being done to the building, and the lack of response from HUD. Management then proceeded to temporarily relocate various residents and authorized the roof replacement, deeming it an emergency. It should be noted that the roof replacement work item was on the HUD approved Capital Improvement Schedule. Management will continue to work with HUD to obtain the necessary approvals and expects to have this situation resolved by December 31, 2023. Additionally, management will strive to obtain all future required approvals from HUD for eligible capital improvements items while at the same time protecting the integrity of the building and safeguarding health and safety of the residents.

Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157 - Supportive Housing for the Elderly, all requests for withdrawals from the reserve for replacements account must be approved by HUD before the funds can be transferred to the operating account. Condition - The Corporation withdrew $82,326 from the reserve for replacement account in 2021 for the replacement of the roof without the approval of HUD. Cause - There were delays in getting a response from the appropriate HUD officials in order to obtain the approval and the contractor was demanding payment. Effect - Funds were improperly withdrawn from the reserve for replacements account and transferred to the operating account without the approval of HUD. Questioned Costs - None identified. Recommendation - The Corporation should continue to work with HUD to seek approval for this withdrawal and assure that all future withdrawals from the reserve for replacements account have HUD approval. Management?s Response - Management is aware of the terms of the regulatory agreement between the Corporation and HUD dated December 22, 2004. Management also considers its role of protecting the health and safety of the residents as well as protecting the building from further damage to be of the upmost importance. That being said, management assessed the overall roof conditions and considered the safety of the residents, the continued damage being done to the building, and the lack of response from HUD. Management then proceeded to temporarily relocate various residents and authorized the roof replacement, deeming it an emergency. It should be noted that the roof replacement work item was on the HUD approved Capital Improvement Schedule. Management will continue to work with HUD to obtain the necessary approvals and expects to have this situation resolved by December 31, 2023. Additionally, management will strive to obtain all future required approvals from HUD for eligible capital improvements items while at the same time protecting the integrity of the building and safeguarding health and safety of the residents.