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; Compliance
Criteria or Specific Requirement: Deposits required by HUD were not made during fiscal year 2025 to the reserve fund.
Condition: During the 2025 audit, we noted that the Project had not deposited the amount required by HUD to be deposited monthly in the reserve fund for February 2025.
Questioned Costs: $1,500 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 for February 2025.
Cause: Due to cash constraints caused by and untimely payment made to a related party the Project was unable to make the deposits.
Effect: The Project did not make sufficient deposits.
Repeat Finding: None.
Recommendation: We recommend the Project enforce procedures that ensure deposits are made timely.
Views of Responsible Officials: There is no disagreement with the audit finding. Management has made the missing deposit as of March 31, 2025.