Finding Text
Findings reference number: 2025-001 - Title and AL Number of Federal Program: Supportive Housing for the Elderly - Section 202 Capital Advance (AL 14.157) - Type of finding: Federal Award (Compliance) - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: Yes - Criteria: Funds should not be withdrawn from the reserve for replacement without HUD's written authorization. - Condition: Review of the reserve for replacement account showed that $57,887 had been withdrawn in 2025 without HUD's approval. - Cause: The Project had shortfalls of operational cash and used some funds from the reserve for replacement account to pay for operating expenses and also used some of the funds to replace funds previously withdrawn from the security deposit account. - Effect: The Project has to redeposit such funds to the reserve for replacement or obtain authorization for the withdrawal. - Noncompliance code: A - Unauthorized withdrawals - Questioned costs: N/A. - Reporting views of officials: Auditee agrees with the finding. - Contract Number: 114-EE093 - Context: The funds were withdrawn because of shortfalls of operating and security deposit cash. - Recommendation: management should not withdraw funds from the reserve for replacement without HUD authorization. - Auditee's comments: Auditee agrees with the finding. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2026 - Response: Management agrees with the findings and will deposit the unauthorized funds as soon as funds are available.