Finding Text
Activities Allowed or Unallowed; Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 Criteria - In accordance with HUD Handbook 4571.3, Section 202 Supportive Housing for the Elderly, loans are not permitted to be made from project cash without prior authorization from HUD. Condition - During the year ended December 31, 2023, the project paid payroll expenses in the amount of $76 on behalf of an affiliate from project cash without HUD approval. The amount due to the project as of December 31, 2024 is $76. Cause - Procedures were not in place to ensure that cash disbursements of projects funds were limited to project operating costs. Effect or Potential Effect - The payment of $76 is an unauthorized loan and therefore considered to be questioned costs. Questioned Costs - $76 Context - During 2023, the project paid payroll expenses for an affiliated entity from project cash account resulting in a receivable in the amount of $76. Identification as a Repeat Finding - This is a repeat finding (see prior year finding number 2023-002). Recommendation - Management should immediately reimburse the amount due to the project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G - Unauthorized loans from project assets. Finding Resolution Status: Completed. Views of Responsible Officials - Management reimbursed the funds to the project on September 4, 2025.