Finding 1080454 (2023-001)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2024-10-29

AI Summary

  • Issue: The Organization repaid $7,200 on a related party loan without having surplus cash or HUD approval.
  • Impacted Requirement: This action violates the Uniform Guidance, which mandates that funds must be spent on necessary and reasonable items for project operations.
  • Recommended Follow-up: The Organization should either seek reimbursement for the $7,200 and $6,000 paid in previous years or obtain approval from HUD for the payments.

Finding Text

Statement of condition: The Organization repaid $7,200 on a related party loan without surplus cash or HUD approval. Criteria: Activities allowed or un-allowed of the Uniform Guidance requires the Organization only spends funds on items that are necessary and reasonable for the Project’s operations. Effect or potential effect: The Organization is not in compliance with Uniform Guidance.Cause: The board of directors requested the Organization make payments on the related party loan. Recommendation: The Organization should seek reimbursement of the $7,200 paid during 2022 and the $6,000 paid during 2021 on the related party loan, or seek approval from the Department of Housing and Urban Development. Reporting views of responsible officials: Our organization is a non-profit entity. Our funds were depleted during the covid pandemic to the point our only available asset was the loan we made to Penn Manor several years ago. So we requested the loan be repaid at an amount the Manor could afford. We apologize for any wrong doing and ask for forgiveness or the error and permission to continue with the repayment so we can continue to operate. Again we do apologize and ask forgiveness.

Categories

Cash Management HUD Housing Programs Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 504012 2023-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $940,832
14.195 Project-Based Rental Assistance (pbra) $255,894