Finding Text
Department of Housing and Urban Development Finding No. 2024-002 - Activities Allowed or Unallowed; Mortgage Insurance Rental Housing, Federal Assistance Listing Number 14.134 Criteria In accordance 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, 2024, the project paid payroll expenses in the amount of $4,342 on behalf of an affiliate from project cash without HUD approval. The amount due to the project as of December 31, 2024 is $4,342. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payment of $4,342 is an unauthorized loan and therefore considered to be questioned costs. Questioned Costs $4,342 Context During 2024, the project paid payroll expenses for another entity from the project’s cash account resulting in a receivable from the other entity in the amount of $4,342. Identification as a Repeat Funding This finding is not a repeat finding. 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 $4,324 on February 28, 2025 and $18 on May 18, 2025 to the project.