Finding Text
Criteria
Loans are not permitted to be made from project cash without prior authorization from HUD.
Condition
During the year ended July 30, 2024, the Project transferred funds in the amount of $12,812 to an
affiliate from project cash without HUD approval. The funds have since been transferred back.
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 $12,812 were unauthorized loans and therefore considered to be questioned
costs.
Questioned Costs
$12,812
Identification as a Repeat Finding
This is not a repeat finding.
Recommendations
Management should establish procedures to ensure payments of this nature are not made in the
future.
Auditor Noncompliance Code:
G. Unauthorized loans from project assets.
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD requirement
for funding. Funds have been transferred and will maintain HUD policy of no unauthorized loans
between affiliates.
Finding Resolutions Status:
Resolved