Finding 1132160 (2024-001)

Criteria Loans are not permitted to be made from project cash without prior authorization from HUD in accordance with the HUD regulatory agreement and PRAC contract. Condition During the year ended December 31, 2024, Cambridge paid expenses in the amount of $2,969 on behalf of an affiliate from project cash without HUD approval. The amount due from the project as of December 31, 2024, is $2,969. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payment of $2,969 is an unauthorized loan and therefore considered to be a questioned cost. Questioned Costs Expenses paid on behalf of an affiliate of $2,969. Context Isolated instance which was not part of a statistical sample. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G - Unauthorized loans from project assets Finding Resolution Status: Resolved Views of Responsible Officials As there has been a change in the Management Agent, the new agent will ensure invoices are recorded to the correct property. The site has been reimbursed for the $2,969 as of March 2025.