FAC Explorer

Audit 401945

FY End
2024-12-31
Total Expended
$2.08M
Findings
1
Programs
1
Organization: Project Support Housing II (CO)
Year: 2024 Accepted: 2026-05-21
Auditor: PETTIT & COMPANY LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1215394 2024-002 Material Weakness Yes P

Programs

ALN Program Spent Major Findings
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $71,008 Yes 0

Contacts

Name Title Type
Q4F6MKH9F3D3 Sally Rush Auditee
3035674285 John Pettit Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards includes the federal award activity of Project Support Housing II and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Project Support Housing II has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Project Support Housing II has received a U.S. Department of Housing and Urban Development capital advance under Section 202 of the National Housing Act. The balance of $2,010,132 at the beginning of the year is included in the federal expenditures presented in the Schedule.

Finding Details

Finding 2024-002
Condition: During our audit of Project Support Housing II for the year ended December 31, 2024, we noted that management made withdrawals totaling $4,700 from the property’s Residual Receipts Account without obtaining the required prior written approval from the U.S. Department of Housing and Urban Development (HUD). The withdrawn funds were used for maintenance expenses. Criteria: HUD regulatory agreements and program requirements stipulate that withdrawals from the Residual Receipts Account must be approved in writing by HUD prior to disbursement. Specifically, the Regulatory Agreement requires that reserve funds “shall be withdrawn only with the written consent of HUD” and must be used solely for the replacement of capital items approved by HUD. Cause: The noncompliance occurred because management did not follow HUD approval procedures prior to withdrawing funds. This appears to have resulted from a misunderstanding of HUD requirements and lack of review procedures. Effect: By withdrawing funds from the Residual Receipts Account without HUD approval, the Organization was not in compliance with its Regulatory Agreement. This action could result in HUD sanctions, require repayment of the withdrawn funds, or otherwise affect the Organization’s future eligibility for HUD programs. The misuse of restricted funds also weakens the Organization’s ability to maintain the property in accordance with HUD standards. Recommendation: We recommend that management: • Submit proper documentation to HUD to request retroactive approval. • Implement internal controls to ensure that all future withdrawals from restricted accounts receive required HUD authorization prior to disbursement. • Provide staff training on HUD regulatory requirements related to restricted accounts. Views of Responsible Officials: Management concurs with the finding. The Organization will initiate corrective action by submitting proper documentation to HUD to request retroactive approval and establishing procedures requiring HUD approval prior to any future withdrawals.