Finding Text
Finding number :2024-001 ALN: 14.155 Mortgage Insurance Grantor: HUD Questioned Costs$0 Description of Condition: Not-for-profit projects are generally not allowed to make distributions of project funds. Condition: A distribution was made to the Project sponsor in the amount of $488,052. The Project would have been allowed a distribution of $75,476 under the terms of the GRP grant program they participated in. Cause of Condition: The Project under went a conversion to a mark-to-market rent structure. There was some confusion about the ability to distribute excess funds based on this conversion. Effect of Condition: Residual receipts account is under funded by $412,576. Recommendations: The Project has applied to HUD for a waiver of the distribution limitation retroactively to last year and forward to future years. This request is still pending. Should the request be denied the sponsor will return the distributed funds in excess of the amount allowed by the GRP grant terms.