Finding Text
Criteria Loans are not permitted to be made from project operating funds without prior approval by HUD. Condition During the year ended June 30, 2025, the Project paid payroll of $14,714 on behalf of an adjacent property without HUD approval. Cause There was an error in the correction of the misallocation of payroll from the prior year. Effect or Potential Effect Use of project funds for unauthorized loans may result in a shortage of cash and default on the project's own obligations. Questioned Costs $14,714 Identification as a Repeat Finding This finding is a repeat finding. Recommendation Management should immediately reimburse the Project amounts due from the affiliate and establish procedures to ensure the corrections of errors are reviewed. Auditor Noncompliance Code: G. Unauthorized loans from project assets. View of Responsible Officials Management agrees with the findings and recommendations, will ensure payroll is allocated correctly going forward. Funds have been transferred. Finding Resolution Status: Resolved