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 four withdrawals from the replacement reserve account during the year ended June 30 , 2025. Sample Size Information - A sample size of two replacement reserve withdrawals were tested. 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 $13,846 were made from the replacement reserve without HUD authorization. Cause - The Organization withdrew $13,846 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 $13,846. Auditor Noncompliance Code - A - Unauthorized withdrawals from replacement reserve account Reporting Views of Responsible Officials - Management agrees with the 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 $13,846. 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 - July 10, 2025 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management has deposited the underfunded amount of $13,846 to the replacement reserve account on July 10, 2025.