Finding 1155658 (2024-001)

Material Weakness Repeat Finding
Requirement
H
Questioned Costs
$1
Year
2024
Accepted
2025-09-26
Audit: 367924
Organization: Judson Terrace, Inc. (OH)

AI Summary

  • Core Issue: Payroll expenses were incorrectly charged to the project, leading to unauthorized distributions.
  • Impacted Requirements: Compliance with the Regulatory Agreement, which limits distributions to available surplus cash.
  • Recommended Follow-Up: Return the $40,399 in questioned costs to the project to restore funding.

Finding Text

S3800-010 Finding Reference Number 2024-1 S3800-015 Type of Finding Federal Award Finding S3800-020 Criteria Compliance with the Regulatory Agreement stipulates that distributions and advances are to be made only to the extent of surplus cash. S3800-030 Statement of Condition The Corporation paid payroll expenses belonging to other projects. S3800-035 Auditor Non-Compliance Code H - Unauthorized distribution of project assets S3800-037 FHA/Contract Number 046-11155 S3800-038 Questioned Costs $40,399 S3800-050 Context Through an error in management's payroll allocation, the Project was billed and paid payroll expenses belonging to other projects. S3800-060 Effect Less funds are available to meet project needs. S3800-070 Cause Management oversight. S3800-080 Recommendation Funds should be returned to the Project.

Corrective Action Plan

S3800-090 Auditor's Summary of the Auditee's Comments on the Finding and Recommendations The Organization concurs that the Project paid payroll expenses belonging to other projects. S3800-130 Response Indicator Agree S3800-140 Completion Date December 31, 2025 S3800-150 Response Management will return $40,399 to the Project. S3800-160 Contact Person First Name Mary S3800-180 Contact Person Last Name Loesche

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
14.134 Mortgage Insurance_rental Housing $2.05M
14.195 Section 8 Housing Assistance Payments Program $226,261