FAC Explorer

Finding 1216462 (2023-003)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2026-06-03
Audit: 402963
Organization: Mt Pleasant Housing Develpment Fund Company (NY)
Auditor: COHNREZNICK LLP

AI Summary

  • Core Issue: The project spent $45,978 on behalf of other affiliates without getting necessary HUD approval.
  • Impacted Requirements: This action violates HUD guidelines regarding project fund usage.
  • Recommended Follow-Up: Ensure all future expenses have proper HUD approval and address the outstanding amount of $372,054 owed to the project.

Finding Text

During the year ended November 30, 2023, the project paid expenses in the amount of $45,978. on behalf of other affiliates from project cash without HUD approval. The amount due to the project as of November 30, 2023 is $372,054, which includes $326,076 paid during the year ended November 30, 2022.

Corrective Action Plan

Concord is making “unauthorized” loans only as it pertains to insurance payments. Until the rental increases are large enough to cover the ongoing increasing costs of insurance premiums, management has no choice but to allow the entity with the most stable cashflow to make the monthly insurance payments on behalf of the entities that are unable to cover their portion. The only available insurance coverage is via a policy that covers all three entities as the cost to cover the entities individually is astronomical. The only way to ensure the entities are insured and there is no lapse in coverage is to allow the entity with the stable cashflow to make the payments and for the other entities to reimburse for their portion. That is until the rental increases are substantial enough to actually cover the rising costs of insurance premiums.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1216461 2023-002
    Material Weakness Repeat
  • 1216463 2023-004
    Material Weakness Repeat
  • 1216464 2023-005
    Material Weakness Repeat
  • 1216465 2023-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $7.26M