Audit 350209

Finding No. 2024-001 – Unauthorized use of project funds for unrelated costs Federal Assistance Listing Number Name of Federal Program or Cluster 14.181 Supporting Housing for Persons With Disabilities FHA/Contract Number 000-HD020-WPD Questioned Costs $6,170 Information on the Universe Population Size Operating cash was reviewed throughout the audit period and at year-end. Sample Size Information Operating cash was reviewed throughout the audit period and at year-end. Identification of Repeat Finding Reference Number None noted Criteria The regulatory agreement requires that project funds are used for related costs. Statement of Condition Due to a fraudulent transaction by an unknown perpetrator, unauthorized funds were withdrawn from the operating cash account and misappropriated. Cause The unknown and unrelated perpetrator created three fraudulent checks that they were able to cash at the bank from the Entity’s operating account. Effect or Potential Effect An unauthorized withdrawal of $6,170 was withdrawn from the operating cash account for unrelated project costs. Auditor Non-Compliance Code Z – Other Questioned Costs $6,170 Section III – Federal Award Findings and Questioned Costs (continued) Perspective Although the perpetrator of the fraud did not have access to the Entity’s check stock, the perpetrator was able to create fraudulent checks and was able to withdraw cash from the Entity’s bank account. The bank is disputing their obligation to reimburse the Entity for the fraudulent checks. Recommendations We recommend that the Entity pursue reimbursement from the Maryland Banking Commission and discuss potential solutions with their HUD representative. Views of Responsible Officials See corrective action plan Contact Person Cathy Voundy-Thomas

Finding No. 2024-001 – Unauthorized use of project funds for unrelated costs Federal Assistance Listing Number Name of Federal Program or Cluster 14.181 Supporting Housing for Persons With Disabilities FHA/Contract Number 000-HD020-WPD Questioned Costs $6,170 Information on the Universe Population Size Operating cash was reviewed throughout the audit period and at year-end. Sample Size Information Operating cash was reviewed throughout the audit period and at year-end. Identification of Repeat Finding Reference Number None noted Criteria The regulatory agreement requires that project funds are used for related costs. Statement of Condition Due to a fraudulent transaction by an unknown perpetrator, unauthorized funds were withdrawn from the operating cash account and misappropriated. Cause The unknown and unrelated perpetrator created three fraudulent checks that they were able to cash at the bank from the Entity’s operating account. Effect or Potential Effect An unauthorized withdrawal of $6,170 was withdrawn from the operating cash account for unrelated project costs. Auditor Non-Compliance Code Z – Other Questioned Costs $6,170 Section III – Federal Award Findings and Questioned Costs (continued) Perspective Although the perpetrator of the fraud did not have access to the Entity’s check stock, the perpetrator was able to create fraudulent checks and was able to withdraw cash from the Entity’s bank account. The bank is disputing their obligation to reimburse the Entity for the fraudulent checks. Recommendations We recommend that the Entity pursue reimbursement from the Maryland Banking Commission and discuss potential solutions with their HUD representative. Views of Responsible Officials See corrective action plan Contact Person Cathy Voundy-Thomas