Finding Text
Finding #2023-003: Section 223(a)(7) HUD Insured Loan, Assistance Listing 14.135 - AAMHA Western Hills, LLC HUD Project No. 115-115888, AAMHA KPTP, LLC HUD Project No 115-35652 and Section 223(f) HUD Insured Loan, Assistance Listing 14.155 - AAMHA Calcasieu, LLC HUD Project No 115-11280 Type of Finding: Significant Deficiency
Type of Finding: Significant Deficiency over Internal Control over Federal Awards
Condition: The management company did not ensure expenses or subsidies received were recorded on the correct operating property’s books.
Criteria: The HUD regulatory agreement requires all expenses paid from the project’s bank account relate to the entity and requires all project cash receipts are deposited into the entity’s bank account.
Questioned Costs: a. $3,199 for AAMHA Western Hills, LLC
b. $24,348 for AAMHA KPTP, LLC
c. $5,869 for AAMHA Calcasieu, LLC
Effect: The Company is in violation of the terms of the HUD Regulatory Agreement governing payment of operating expenses and costs and recording cash receipts.
Cause: Oversight
Repeat Finding: Yes
Recommendation: Management should review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement.
Management’s
Comment: Management is in agreement with finding and will review Regulatory agreement. Management will transfer funds to the appropriate affiliate.
Auditor’s Comment: a. AAMHA Western Hills, LLC - On April 24, 2024, $3,199 was received from an affiliate.
b. AAMHA KPTP, LLC - During 2023, $16,321 was received from affiliates. On May 10, 2023, the Project received $8,027.
c. AAMHA Calcasieu, LLC – On April 16, 2024, the Project received $5,869 from an affiliate.