Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 811 – Capital Advances, Section 811 – Project Rental Assistance Assistance Listing Number: 14.181 Federal Award Identification Number and Year: N/A Award Period: January 1, 2025 through December 31, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Finding Noncompliance: Description of Universe Tested: Reviewed compliance around reserve account withdrawals. Criteria or specific requirement: Management of the Project is required to obtain written HUD approval before withdrawing any funding from the reserve account. Condition: According to HUD Regulations, the Organization is required to request and receive permission for any withdrawals from the replacement reserve account. Questioned costs: N/A Context: Management of the Project is required to obtain written HUD approval before withdrawing any funding from the reserve account. Cause: There were withdrawals from the Reserve and Replacement account during the year totaling $22,516 which did not receive proper HUD approval. Effect: The Organization should comply with HUD requirements and wait until receipt of HUD approval before withdrawing any funding from the Reserve for Replacement account. Repeat Finding: No. Recommendation: The Organization should comply with HUD requirements and wait until receipt of HUD approval before withdrawing any funding from the Reserve for Replacement account. Views of responsible officials: Management agrees with the finding and will take steps to adjust the budget and ensure there is proper approval before withdrawing any funds from the R&R account moving forward.