Finding 1137534 (2024-001)

Findings and Questioned Costs - Major Federal Award Program Audit Finding No. 2024-001 Major Federal Programs ALN 14.135 Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate (Section 221(d)(4)) Program, and ALN 14.856 Lower Income Housing Assistance Program - Section 8 Moderate Rehabilitation. Criteria The regulations under which the Organization operates prohibit unauthorized use of Project assets. Statement of Condition During 2024, the Organization made gifts of $118,186 to an affiliated real estate entity from its operating funds and also paid an expense of $14,681 of this affiliated real estate entity from its property insurance escrow deposits account. These transactions represent an unauthorized use of Project assets. Cause The Organization made gifts of $118,186 to an affiliated real estate entity from its operating funds. The Organization also paid an expense of $14,681 of this affiliated real estate entity from its property insurance escrow deposits account. Effect or Potential Effect The unauthorized use of Project assets results in the loss of those assets for use in Project operations. Questioned Costs $132,867 Recommendations The Organization should transfer $118,186 from its entity cash account to the Project’s operating account and $14,681 from its entity cash account to the Project’s property insurance escrow deposits account. Reporting Views of Responsible Officials On March 11, 2025, the Organization transferred $118,186 from its entity cash account into the Project’s operating account. On March 27, 2025, the Organization transferred $14,681 from its entity cash account to the Project’s property insurance escrow deposits account.