Core Issue: The Organization failed to make a required payment of $45,194 on the Mortgage Restructuring Loan in 2024.
Impacted Requirements: This finding highlights a material weakness in internal controls and noncompliance with loan payment terms.
Recommended Follow-up: Implement stronger internal controls and monitoring processes to ensure timely compliance with loan payment obligations.
Finding Text
Finding 2024-003: Lower Income Housing Assistance Program - Section 8 New Construction and
Substantial Rehabilitation
Assistance Listing Number: 14.182
U.S. Department of Housing and Urban Development
Compliance Requirements: Special Tests and Provisions
Type of finding: Internal Control (material weakness) and Compliance (material noncompliance)
Criteria: Mortgage Restructuring Loan terms require an annual payment of 85% of restricted surplus cash to be paid on the note.
Condition: The Organization did not make the required $45,194 payment on the Mortgage Restructuring Loan in 2024.
Cause: The Organization has not established a monitoring process to ensure that required payments are made in accordance with the terms of the loan.
Effect: Noncompliance with the Mortgage Restructuring Loan payment terms.
Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to establish a monitoring process to ensure compliance with Mortgage Restructuring Loan terms and conditions.
Grantee’s Response: See corrective action plan.
Categories
Special Tests & ProvisionsSubrecipient MonitoringHUD Housing ProgramsMaterial WeaknessMatching / Level of Effort / EarmarkingInternal Control / Segregation of Duties