Finding 1080363 (2024-001)

Material Weakness
Requirement
A
Questioned Costs
$1
Year
2024
Accepted
2024-10-28

AI Summary

  • Core Issue: Unauthorized use of project cash for loans without HUD approval, totaling $3,896.
  • Impacted Requirements: Loans from project cash must have prior authorization from HUD.
  • Recommended Follow-Up: Management should reimburse the project and implement procedures to prevent future unauthorized payments.

Finding Text

Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended June 30, 2024, the Project paid expenses in the amount of $3,896 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of June 30, 2024 is $3,896. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect Use of project funds for unauthorized loans may result in shortage of cash and default on Project's own obligations. Questioned Costs The payments of $3,896 were unauthorized loans and therefore considered to be questioned costs. Identification as a Repeat Finding This finding is 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. Views of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for loans. Funds have been transferred and loans will not be permitted based on HUD requirements going forward.

Categories

Questioned Costs HUD Housing Programs Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 503920 2024-001
    Material Weakness
  • 503921 2024-001
    Material Weakness
  • 503922 2024-002
    Material Weakness
  • 503923 2024-002
    Material Weakness
  • 503924 2024-003
    Material Weakness
  • 503925 2024-003
    Material Weakness
  • 503926 2024-004
    Material Weakness
  • 503927 2024-004
    Material Weakness
  • 503928 2024-005
    Material Weakness
  • 503929 2024-005
    Material Weakness
  • 503930 2024-006
    Material Weakness
  • 503931 2024-006
    Material Weakness
  • 503932 2024-007
    Material Weakness
  • 503933 2024-007
    Material Weakness
  • 1080362 2024-001
    Material Weakness
  • 1080364 2024-002
    Material Weakness
  • 1080365 2024-002
    Material Weakness
  • 1080366 2024-003
    Material Weakness
  • 1080367 2024-003
    Material Weakness
  • 1080368 2024-004
    Material Weakness
  • 1080369 2024-004
    Material Weakness
  • 1080370 2024-005
    Material Weakness
  • 1080371 2024-005
    Material Weakness
  • 1080372 2024-006
    Material Weakness
  • 1080373 2024-006
    Material Weakness
  • 1080374 2024-007
    Material Weakness
  • 1080375 2024-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $6.20M
14.157 Supportive Housing for the Elderly ("prac") $508,080