2024 – 001 Replacement Reserve – Unauthorized Withdrawal
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: The Organization did not receive approval from HUD for disbursements made from the Replacement Reserve account.
Criteria: As required by HUD program requirements, withdrawals from the replacement reserve account much be authorized prior to disbursement.
Condition and context: During 2024, a $12,027 withdrawal was made from the replacement reserve account to pay for insurance coverage for Northwest Estates 811. Management did not obtain documentation HUD approval of the request to withdraw these funds nor did it retain an invoice to support the cost of coverage.
Cause: Management did not have adequate internal controls and procedures in place to ensure proper approval of funds prior to disbursement.
Sample size and population: Sampling was not applicable to this finding.
Effect: As a result of the unauthorized withdrawal, the Organization did not comply with applicable HUD requirements to obtain HUD approval prior to withdrawing funds from the replacement reserve.
Recommendation: We recommend management implement policies and procedures to monitor transactions and prevent unauthorized withdrawals from reserve accounts.
Questioned Costs: $12,027
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 002 Unauthorized Loan of Project Funds
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: Funds were improperly disbursed.
Criteria: HUD program requirements prohibit using project funds to make operating advances or loans to other entities without the approval of HUD.
Condition and context: During 2024, the property manager processed a check payment which paid for a service provided to a related party property from the account of Northwest Estates 811. This error was not detected or corrected by year end.
Cause: Property manager made an error in coding one payment made during the year, and the error was not detected or corrected by year end.
Sample size and population: Population is the number of check disbursements during the year, totaling 179. Sample size selected was 40 check disbursements.
Effect: As a result of this error, an unauthorized advance was made to a separate entity, against the applicable HUD program requirements. This advance has been recorded as receivable on the December 31, 2024 financial statements as accounts receivable from related party.
Recommendation: We recommend the Partnership implement policies and procedures to monitor the coding of transactions and prevent unauthorized advances.
Questioned Costs: $3,368
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 001 Replacement Reserve – Unauthorized Withdrawal
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: The Organization did not receive approval from HUD for disbursements made from the Replacement Reserve account.
Criteria: As required by HUD program requirements, withdrawals from the replacement reserve account much be authorized prior to disbursement.
Condition and context: During 2024, a $12,027 withdrawal was made from the replacement reserve account to pay for insurance coverage for Northwest Estates 811. Management did not obtain documentation HUD approval of the request to withdraw these funds nor did it retain an invoice to support the cost of coverage.
Cause: Management did not have adequate internal controls and procedures in place to ensure proper approval of funds prior to disbursement.
Sample size and population: Sampling was not applicable to this finding.
Effect: As a result of the unauthorized withdrawal, the Organization did not comply with applicable HUD requirements to obtain HUD approval prior to withdrawing funds from the replacement reserve.
Recommendation: We recommend management implement policies and procedures to monitor transactions and prevent unauthorized withdrawals from reserve accounts.
Questioned Costs: $12,027
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 002 Unauthorized Loan of Project Funds
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: Funds were improperly disbursed.
Criteria: HUD program requirements prohibit using project funds to make operating advances or loans to other entities without the approval of HUD.
Condition and context: During 2024, the property manager processed a check payment which paid for a service provided to a related party property from the account of Northwest Estates 811. This error was not detected or corrected by year end.
Cause: Property manager made an error in coding one payment made during the year, and the error was not detected or corrected by year end.
Sample size and population: Population is the number of check disbursements during the year, totaling 179. Sample size selected was 40 check disbursements.
Effect: As a result of this error, an unauthorized advance was made to a separate entity, against the applicable HUD program requirements. This advance has been recorded as receivable on the December 31, 2024 financial statements as accounts receivable from related party.
Recommendation: We recommend the Partnership implement policies and procedures to monitor the coding of transactions and prevent unauthorized advances.
Questioned Costs: $3,368
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 001 Replacement Reserve – Unauthorized Withdrawal
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: The Organization did not receive approval from HUD for disbursements made from the Replacement Reserve account.
Criteria: As required by HUD program requirements, withdrawals from the replacement reserve account much be authorized prior to disbursement.
Condition and context: During 2024, a $12,027 withdrawal was made from the replacement reserve account to pay for insurance coverage for Northwest Estates 811. Management did not obtain documentation HUD approval of the request to withdraw these funds nor did it retain an invoice to support the cost of coverage.
Cause: Management did not have adequate internal controls and procedures in place to ensure proper approval of funds prior to disbursement.
Sample size and population: Sampling was not applicable to this finding.
Effect: As a result of the unauthorized withdrawal, the Organization did not comply with applicable HUD requirements to obtain HUD approval prior to withdrawing funds from the replacement reserve.
Recommendation: We recommend management implement policies and procedures to monitor transactions and prevent unauthorized withdrawals from reserve accounts.
Questioned Costs: $12,027
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 002 Unauthorized Loan of Project Funds
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: Funds were improperly disbursed.
Criteria: HUD program requirements prohibit using project funds to make operating advances or loans to other entities without the approval of HUD.
Condition and context: During 2024, the property manager processed a check payment which paid for a service provided to a related party property from the account of Northwest Estates 811. This error was not detected or corrected by year end.
Cause: Property manager made an error in coding one payment made during the year, and the error was not detected or corrected by year end.
Sample size and population: Population is the number of check disbursements during the year, totaling 179. Sample size selected was 40 check disbursements.
Effect: As a result of this error, an unauthorized advance was made to a separate entity, against the applicable HUD program requirements. This advance has been recorded as receivable on the December 31, 2024 financial statements as accounts receivable from related party.
Recommendation: We recommend the Partnership implement policies and procedures to monitor the coding of transactions and prevent unauthorized advances.
Questioned Costs: $3,368
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 001 Replacement Reserve – Unauthorized Withdrawal
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: The Organization did not receive approval from HUD for disbursements made from the Replacement Reserve account.
Criteria: As required by HUD program requirements, withdrawals from the replacement reserve account much be authorized prior to disbursement.
Condition and context: During 2024, a $12,027 withdrawal was made from the replacement reserve account to pay for insurance coverage for Northwest Estates 811. Management did not obtain documentation HUD approval of the request to withdraw these funds nor did it retain an invoice to support the cost of coverage.
Cause: Management did not have adequate internal controls and procedures in place to ensure proper approval of funds prior to disbursement.
Sample size and population: Sampling was not applicable to this finding.
Effect: As a result of the unauthorized withdrawal, the Organization did not comply with applicable HUD requirements to obtain HUD approval prior to withdrawing funds from the replacement reserve.
Recommendation: We recommend management implement policies and procedures to monitor transactions and prevent unauthorized withdrawals from reserve accounts.
Questioned Costs: $12,027
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson
2024 – 002 Unauthorized Loan of Project Funds
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: Funds were improperly disbursed.
Criteria: HUD program requirements prohibit using project funds to make operating advances or loans to other entities without the approval of HUD.
Condition and context: During 2024, the property manager processed a check payment which paid for a service provided to a related party property from the account of Northwest Estates 811. This error was not detected or corrected by year end.
Cause: Property manager made an error in coding one payment made during the year, and the error was not detected or corrected by year end.
Sample size and population: Population is the number of check disbursements during the year, totaling 179. Sample size selected was 40 check disbursements.
Effect: As a result of this error, an unauthorized advance was made to a separate entity, against the applicable HUD program requirements. This advance has been recorded as receivable on the December 31, 2024 financial statements as accounts receivable from related party.
Recommendation: We recommend the Partnership implement policies and procedures to monitor the coding of transactions and prevent unauthorized advances.
Questioned Costs: $3,368
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson