Audit 41659

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HUD requires that security deposits be returned to the tenant within 30 days of the move-out date. Condition: Two of the eight security deposits tested were not returned to the tenant within the 30-day HUD requirement. Questioned costs: None Context: There were thirty-one tenants who had security deposits returned during 2022. For two out of eight tenants tested for security deposit move-outs, the Organization did not refund their security deposits on a timely basis. Cause: The Organization did not follow proper check disbursement procedures and the payment of the security deposit refund checks was delayed. Effect: The Organization did not properly implement check disbursement and moveout procedures, which resulted in a violation of the HUD 30-day security deposit refund requirement. Repeat Finding: No Recommendation: We recommend that the Organization follow proper procedures regarding security deposits for move-outs to ensure timely refunds. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HUD requires that payments of distributions and other nonproject related cash disbursements can only be made with available surplus cash. Condition: During 2022, the Organization made operating advances of $9,208 for expenses belonging to organizations related by common control. These advances were in excess of amounts available from surplus cash as determined by HUD regulations and represent a control deficiency as the matter was not identified timely. Questioned costs: $9,208 Context: Four quarters were tested for the transactions for three entities with common control for a total of twelve quarters. During two of the twelve quarters tested, we noted a receivable balance when there was no surplus cash available to loan. In addition, during testing of contributions to and from the Organization, we noted a contribution from the Organization to an entity related by common control when there was no surplus cash available. Cause: The Organization paid expenses pertaining to affiliated organizations when there was no available surplus cash by error. Effect: The Organization made an unauthorized distribution of project funds, which is a violation of the Organization?s agreement with HUD. Repeat Finding: No Recommendation: We recommend that no expenses be paid on behalf of related organizations when surplus cash is not available and that the Organization complete timely reviews of related organization financial activity to ensure no unauthorized advances occur. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HUD requires that security deposits be returned to the tenant within 30 days of the move-out date. Condition: Two of the eight security deposits tested were not returned to the tenant within the 30-day HUD requirement. Questioned costs: None Context: There were thirty-one tenants who had security deposits returned during 2022. For two out of eight tenants tested for security deposit move-outs, the Organization did not refund their security deposits on a timely basis. Cause: The Organization did not follow proper check disbursement procedures and the payment of the security deposit refund checks was delayed. Effect: The Organization did not properly implement check disbursement and moveout procedures, which resulted in a violation of the HUD 30-day security deposit refund requirement. Repeat Finding: No Recommendation: We recommend that the Organization follow proper procedures regarding security deposits for move-outs to ensure timely refunds. Views of responsible officials: There is no disagreement with the audit finding.

Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HUD requires that payments of distributions and other nonproject related cash disbursements can only be made with available surplus cash. Condition: During 2022, the Organization made operating advances of $9,208 for expenses belonging to organizations related by common control. These advances were in excess of amounts available from surplus cash as determined by HUD regulations and represent a control deficiency as the matter was not identified timely. Questioned costs: $9,208 Context: Four quarters were tested for the transactions for three entities with common control for a total of twelve quarters. During two of the twelve quarters tested, we noted a receivable balance when there was no surplus cash available to loan. In addition, during testing of contributions to and from the Organization, we noted a contribution from the Organization to an entity related by common control when there was no surplus cash available. Cause: The Organization paid expenses pertaining to affiliated organizations when there was no available surplus cash by error. Effect: The Organization made an unauthorized distribution of project funds, which is a violation of the Organization?s agreement with HUD. Repeat Finding: No Recommendation: We recommend that no expenses be paid on behalf of related organizations when surplus cash is not available and that the Organization complete timely reviews of related organization financial activity to ensure no unauthorized advances occur. Views of responsible officials: There is no disagreement with the audit finding.