Finding Text
Federal Agency: U.S. Department of Housing and Urban Development (HUD)
Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811)
Assistance Listing Number: 14.181
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or Specific Requirement: Deposits required by HUD were not made during fiscal year 2024 to the reserve fund.
Condition: During the 2024 audit, we noted that the Project had not deposited the amounts required by HUD to be deposited monthly in the reserve fund for all of fiscal year 2024.
Questioned Costs: $8,580 in reserve fund deposits not made.
Context: Through audit compliance testing procedures, three months of bank reconciliations were tested and identified that the required monthly deposit was not made. Through further inquiry and review it was identified that all 12 deposits of fiscal year 2024 were not made and recorded as a liability.
Cause: Due to cash constraints caused by rental income delays the Project was unable to make the deposits.
Effect: The Project did not make sufficient deposits.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001.
Recommendation: We recommend the Project make all fiscal year 2024 deposits as soon as funds allow.
Views of Responsible Officials: There is no disagreement with the audit finding. Management has received the delayed rental income payments and is working to make the back deposits.