Finding Text
2024 – 001 Replacement Reserve – Unauthorized Withdrawal
ALN Numbers Name of Federal Program: 14.181 HUD - Section 811, Supportive Housing for Disabled Persons
Identification as a Repeat Finding: This finding is not a repeat finding from 2023
Finding: The Organization did not receive approval from HUD for disbursements made from the Replacement Reserve account.
Criteria: As required by HUD program requirements, withdrawals from the replacement reserve account much be authorized prior to disbursement.
Condition and context: During 2024, a $12,027 withdrawal was made from the replacement reserve account to pay for insurance coverage for Northwest Estates 811. Management did not obtain documentation HUD approval of the request to withdraw these funds nor did it retain an invoice to support the cost of coverage.
Cause: Management did not have adequate internal controls and procedures in place to ensure proper approval of funds prior to disbursement.
Sample size and population: Sampling was not applicable to this finding.
Effect: As a result of the unauthorized withdrawal, the Organization did not comply with applicable HUD requirements to obtain HUD approval prior to withdrawing funds from the replacement reserve.
Recommendation: We recommend management implement policies and procedures to monitor transactions and prevent unauthorized withdrawals from reserve accounts.
Questioned Costs: $12,027
Management Response and Corrective Action Plan: See corrective action plan on page 49.
Contact Person: Tom Anderson