FAC Explorer

Finding 1179593 (2023-006)

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

AI Summary

  • Answer: The Project's fidelity bond is underfunded by $56,366.
  • Trend: The required coverage should equal two months of gross potential income, which is $207,366.
  • List: Review bond coverage and consider increasing it to meet the required amount.

Finding Text

The Project is covered by a $151,000 fidelity bond and fidelity insurance. The Project fidelity bond coverage for the value of two months of the gross potential income should be $207,366 (monthly gross potential income $103,683 X 2 months). The fidelity bond coverage has a shortage of $56,366.

Corrective Action Plan

The Project will implement a procedure to review its coverage annually to align with the grantor contract notification of gross rent income projection. The current year’s insurance policy will be adjusted to reflect appropriate coverage. The Project reviewed its policies in successive years to increase coverage. As a result, coverage was increased to $151,000 in January 2024 and the required coverage (two times gross revenue total) was met in July 2024.

Categories

No categories assigned yet.

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
  • 1179590 2023-003
    Material Weakness Repeat
  • 1179591 2023-004
    Material Weakness Repeat
  • 1179592 2023-005
    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