FAC Explorer

Finding 1179590 (2023-003)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2026-03-16
Audit: 391997
Organization: Urban Development Corporation (IL)
Auditor: ALEXANDER MANNIE & COMPANY PC

AI Summary

  • Issue: An SBA Economic Injury Disaster Loan was taken out without proper authorization from governance.
  • Requirements Impacted: The loan was recorded in financial statements, but lacked necessary approval from HUD.
  • Recommended Follow-up: Investigate the unauthorized expenditures and ensure proper governance protocols are followed in future agreements.

Finding Text

On June 13, 2020, an SBA Economic Injury Disaster Loan was initiated without the knowledge and authorization of those charged with governance. The loan has been identified and recorded in the financial statements; however, HUD did not grant permission to enter into the agreement. We were unable to verify expenditures; however, they were unauthorized.

Corrective Action Plan

The Project will contact HUD and SBA to discuss favorable remedies to resolve the issues. Procedures related to authorization have been enhanced to ensure that transactions entered into by the Project are allowable.

Categories

HUD Housing Programs Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1179586 2023-001
    Material Weakness Repeat
  • 1179587 2023-001
    Material Weakness Repeat
  • 1179588 2023-002
    Material Weakness Repeat
  • 1179589 2023-002
    Material Weakness Repeat
  • 1179591 2023-004
    Material Weakness Repeat
  • 1179592 2023-005
    Material Weakness Repeat
  • 1179593 2023-006
    Material Weakness Repeat
  • 1179594 2023-007
    Material Weakness Repeat
  • 1179595 2023-007
    Material Weakness Repeat
  • 1179596 2023-008
    Material Weakness Repeat
  • 1179597 2023-008
    Material Weakness Repeat
  • 1179598 2023-009
    Material Weakness Repeat
  • 1179599 2023-009
    Material Weakness Repeat
  • 1179600 2023-010
    Material Weakness Repeat
  • 1179601 2023-011
    Material Weakness Repeat
  • 1179602 2023-011
    Material Weakness Repeat
  • 1179603 2023-012
    Material Weakness Repeat
  • 1179604 2023-012
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.155 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS $2.36M
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $1.03M