Finding Text
FINDING 2023-003: Significant Deficiency in Internal Control over Compliance – 2019 Replacement Reserve Drawdowns Federal Program: ALN 14.157 – Supportive Services for the Elderly (Section 202) Pass-Through Entity: U.S. Department of Housing and Urban Development Award Number: N/A Compliance Requirement: N – Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control over Compliance Questioned Costs: $3,300 Criteria: All releases from the replacement reserve should be for qualified expenses and should be approved by HUD. Condition: Due to an administrative error, too much was distributed from the replacement reserve in 2019. Cause: An invoice was submitted by management, but was paid by the nonprofit sponsor’s foundation on the Project’s behalf. Effect or Potential Effect: The replacement reserve is underfunded by $3,300 at June 30, 2023. Recommendation: Due to cash flow constraints, the Project was not able to repay the nonprofit sponsor’s foundation for the submitted invoice paid on the Project’s behalf. The Project will repay the nonprofit sponsor’s foundation when cash is available. Auditee Response/Corrective Action Plan: Management agrees with the finding. The Project will repay the nonprofit sponsor’s foundation when cash is available. Repeat Finding: This is a repeat finding. The prior year finding reference number was 2022-003. Planned Implementation Date: There is not an anticipated completion date. Person Responsible for Corrective Action: Manager