Finding Text
Finding Type: Immaterial noncompliance with major program requirements Significant deficiency in internal control over compliance Title and Assistance Listing Number of Federal Program 14.157 Supportive Housing for the Elderly Project Rental Assistance Contract and Capital Advance Finding Resolution Status In process Information on Universe and Population Size The Organization made 12 withdrawals from the replacement reserve account during the year ended June 30 , 2025. Sample Size Information A sample size of three replacement reserve withdrawals were tested for compliance. Identification of Repeat Finding and Finding Reference Number N/A Criteria The Organization should have HUD authorization for all withdrawals from the replacement reserve account prior to withdrawing funds, as required by the Regulatory Agreement. Statement of Condition Withdrawals totaling $8,603 were made from the replacement reserve without HUD authorization. Cause The Organization withdrew $8,603 from the replacement reserve account without obtaining prior approval from HUD. Effect or Potential Effect The unauthorized withdrawals caused the replacement reserve account to be underfunded at year end by $8,603. Auditor Noncompliance Code A Unauthorized withdrawals from replacement reserve account Reporting Views of Responsible Officials Management agrees with finding. Context The Organization is required to obtain HUD authorization prior to the withdrawal of funds from the replacement reserve account. Recommendation The Organization needs to make a deposit to correct underfunding of replacement reserve account in the amount $8,603. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management should obtain approval from HUD prior to withdrawing funds from the replacement reserve. Response Indicator Agree Completion Date N/A