Finding Text
Finding Number 2024-001 • Federal Grantor – U.S. Department of Housing and Urban Development • Federal Program Name – Section 202 Supportive Housing and Capital Advance • Assistance Listing Number – 14.157 • Finding Type – Significant Deficiency in Internal Control over Compliance • Criteria – According to the Regulatory Agreement, the Project is required to comply with the requirements regarding the maintenance of the reserve for replacement account. • Condition – The Project received permission from HUD to borrow $27,513 from the reserve for replacement account which was to be repaid upon receipt of the September 2024 voucher from HUD. However, the Project did not repay the loaned funds in a timely manner. • Cause – Management did not monitor the cash flow in order to comply with the agreement. • Effect – Funds were not repaid in accordance with the terms of the agreement. • Context – Funds were not repaid to the reserve for replacement account as required. • Questions Costs – $27,513 • Repeat Finding – No • Recommendation – Management needs to monitor the reserve for replacement account and when funds are borrowed, they need to comply with the terms of the agreement. • Views of Responsible Officials – Management acknowledges the finding and has reimbursed the funds. Management has set up additional internal controls to monitor any loans from the reserve account.