Finding 1120831 (2024-001)

Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria Any withdrawal from the replacement reserve requires HUD approval evidenced by a signed HUD-9250. Condition During the year ended June 30, 2024, the project withdrew $100,000 from the replacement reserve without having obtained the appropriate approvals. Cause Procedures in place were not followed. Effect The withdrawal of $100,000 is an unauthorized withdrawal from the replacement reserve. Questioned Costs None Identification as a Repeat Finding No. Recommendation Management should ensure that there is a mechanism and procedures in place to ensure proper approval evidenced by a signed HUD-9250 before withdrawing funds from the replacement reserve. Management should obtain retroactive approval for the withdrawal. Auditor Noncompliance Code: A. Unauthorized withdrawals from replacement reserve account Finding resolution status: Resolved/In process. View of responsible officials and planned corrective actions Management will review and revise the protocols to avoid withdraws without prior HUD approval.