Finding 1208847 (2025-001)

2025-001 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 232 HUD Insured Mortgage Assistance Living Number: 14.157 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirements: Replacement reserve withdrawal form required an internal signature for Approval prior to submitting to HUD. Condition: Management is responsible for reviewing the replacement reserve withdrawal form to verify proper approval and signature. Context: While performing audit procedures it was noted that the client did not get the proper approval and signature from management on the replacement reserve withdrawal form for two of the three requests during 2025. Cause: The Project did not monitor this control and get the proper approval or signature. Effect: Replacement reserve withdrawal form was sent to HUD without proper approval and signature. Repeat Finding: No Recommendation: Recommend management follows the controls and procedures in place and to verify these are followed prior to sending any replacement reserve withdrawal request forms to HUD. Views on Responsible Officials: There is no disagreement with the audit finding.