Audit 54338

Department of Housing and Urban Development Finding No. 2022-001; Section 811 Capital Advance, Assistance Listing 14.181 Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended December 31, 2022, the Project paid expenses in the amount of $4,993 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of December 31, 2022 is $4,993. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payments of $4,993 were unauthorized loans and are therefore considered to be questioned costs. Questioned Costs Questioned costs totaled $4,993. Context In connection with the procedures applied to a sample of 12 disbursements, there were two instances, totaling $2,944, where management did not detect and timely correct disbursements made on behalf of another EHI managed project with a similar project name. Upon review, management found additional invoices totaling $2,050. Identification as a Repeat Finding Not a repeat finding.Recommendation Management should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G ? Unauthorized loans from project assets. Finding Resolution Status: Resolved. The Project was reimbursed via check in the amount of $4,993 for the funds disbursed on behalf of a different EHI managed project on March 14, 2023. Views of Responsible Officials Management concurs that the Project paid expenses in the amount of $4,994 on behalf of an affiliate from project cash without HUD approval. Management further notes that they have retrained staff, reaffirmed the review and approval process to ensure accuracy and existence of each transaction to ensure no cash disbursements are made on behalf of affiliates without HUD approval. Management has made changes to internal controls to prevent and detect unauthorized cash disbursements from project assets. It has also requested reimbursement from the affiliate project and funds have been reimbursed.

Department of Housing and Urban Development Finding No. 2022-001; Section 811 Capital Advance, Assistance Listing 14.181 Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended December 31, 2022, the Project paid expenses in the amount of $4,993 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of December 31, 2022 is $4,993. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payments of $4,993 were unauthorized loans and are therefore considered to be questioned costs. Questioned Costs Questioned costs totaled $4,993. Context In connection with the procedures applied to a sample of 12 disbursements, there were two instances, totaling $2,944, where management did not detect and timely correct disbursements made on behalf of another EHI managed project with a similar project name. Upon review, management found additional invoices totaling $2,050. Identification as a Repeat Finding Not a repeat finding.Recommendation Management should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G ? Unauthorized loans from project assets. Finding Resolution Status: Resolved. The Project was reimbursed via check in the amount of $4,993 for the funds disbursed on behalf of a different EHI managed project on March 14, 2023. Views of Responsible Officials Management concurs that the Project paid expenses in the amount of $4,994 on behalf of an affiliate from project cash without HUD approval. Management further notes that they have retrained staff, reaffirmed the review and approval process to ensure accuracy and existence of each transaction to ensure no cash disbursements are made on behalf of affiliates without HUD approval. Management has made changes to internal controls to prevent and detect unauthorized cash disbursements from project assets. It has also requested reimbursement from the affiliate project and funds have been reimbursed.