Finding Text
S3800-010 Finding Reference Number – 2025-003 S3800-011 Title and CFDA Number of Federal Program – Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 S3800-015 Type of Finding – Federal Award Finding; Other Matters S3800-016 Finding Resolution Status – Resolved S3800-017 Information on Universe Population Size – N/A S3800-018 Sample Size Information – N/A S3800-019 Identification of Repeat Finding and Finding Reference Number – N/A S3800-020 Criteria – Per the HUD Handbook 4350.1 REV-1, the Project is required to establish and maintain an insurance escrow in a separate account. In addition, the Corporation is required to deposit an amount equal to one-twelfth of insurance premiums per month unless a different date or amount is approved in writing by HUD. S3800-030 Statement of Condition – During the year ended September 30, 2025, the Corporation underfunded the insurance escrow by $174. S3800-032 Cause – During the year ended September 30, 2025, there was turnover in the accounts payable position. As a result, the monthly deposits stopped after May 2025. S3800-033 Effect or Potential Effect – There are less funds available for insurance payment when due. S3800-035 Auditor Non-Compliance Code – Z (Other) S3800-037 FHA/Contract Number – 171-EE015 S3800-038 Questioned Costs – $0 S3800-040 Questioned Costs – $0 S3800-045 Reporting Views of Responsible Officials – Sessions Village 202 is in agreement with the finding. S3800-050 Context – After May 2025, the monthly deposits into the insurance escrow stopped. A true-up payment was made in July 2025 to cover the remainder of the fiscal year, but the amount was short by $174. S3800-080 Recommendation – We recommend Sessions Village 202 deposit the underfunded amount into the account. Also, we recommend management of Sessions Village 202 review their internal controls over the insurance escrow deposit process with the necessary individuals involved in the process to ensure the appropriate deposits are made going forward. In addition, we recommend management review their monitoring controls to ensure a secondary review is conducted at least quarterly to ensure the appropriate deposits were made. S3800-090 Auditor’s Summary of Auditee Comments on the Findings and Recommendations – In May 2026, the amount was deposited into the account. The Executive Director/Administrator and Accountant at the management agent reviewed the process and procedures in place with the new accounts payable clerk, and implemented controls to ensure the appropriate deposits are made going forward. S3800-130 Response Indicator – Agree S3800-140 Completion Date – May 28, 2026 S3800-150 Response – In May 2026, the amount was deposited into the account. The Executive Director/Administrator and Accountant at the management agent reviewed the process and procedures in place with the new accounts payable clerk, and implemented controls to ensure the appropriate deposits are made going forward.