Finding Text
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
Expenses charged to the project should be for reasonable expenses necessary for the operation and maintenance of the project, unless prior authorization from HUD has been received.
Condition
During the year ended June 30, 2024, the project paid for expenses in the amount of $1,838 that were not related to the project.
Cause
Procedures were not being followed to ensure that charges to the project were limited to project operating costs.
Effect
The recording of $550 for a legal invoice and $1,288 for audit allocation of fees was not for reasonable expenses of the property and therefore considered to be questioned costs.
Questioned Costs
$1,838
Context
Instances which were not part of a statistical sample.
Identification as a Repeat Finding
No.
Recommendation
Management should follow their internal controls and procedures to ensure only expenses of the project are recorded in the books and records.
Auditor Noncompliance Code: G. Unauthorized loans from project assets
Finding resolution status: Resolved
View of responsible officials and planned corrective actions
As of March 26, 2025, these amounts have been credited back to the company through the central disbursement accounting system. Management will implement reviews on a quarterly basis will be performed to ensure that only expenses related to the Corporation are included in expenses and will review indirect allocations to ensure only appropriate expenses approved in the HUD budget will be included in expenses.