Finding 1223065 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-07-07
Audit: 406642
Organization: Lorna Doone Associates, LLC (UT)

AI Summary

  • Core Issue: Funds were improperly paid for a surplus cash loan without actual surplus cash available.
  • Impacted Requirements: Payments must align with HUD guidelines, which require positive surplus cash at the end of fiscal periods.
  • Recommended Follow-Up: Management should verify net positive surplus cash before making any payments.

Finding Text

Management paid funds for a surplus cash loan with the State of Utah when there was no surplus cash available. In accordance with HUD guidelines and requirements, distributions and payments may only be made after the end of any annual or semi-annual fiscal period, and when positive surplus cash is demonstrated. Noncompliance with HUD program guidelines. Management did not follow the established policies or HUD regulations because of the timing of when they believed surplus cash was available. We recommend that management should ensure to make payments only if net positive surplus cash is calculated. Z - Other. Amount of Questioned Costs - $8,183.

Corrective Action Plan

a. Management is negotiating a solution with the State of Utah and HUD for a refund of the payment.

Categories

HUD Housing Programs Matching / Level of Effort / Earmarking

Programs in Audit

ALN Program Name Expenditures
14.195 SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM $893,650
14.138 MORTGAGE INSURANCE_RENTAL HOUSING FOR THE ELDERLY $785,570