Finding 1227186 (2025-002)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2025
Accepted
2026-08-18

AI Summary

  • Core Issue: The Corporation improperly paid $7,680 in costs without HUD's written approval, violating funding agreements.
  • Impacted Requirements: Non-compliance with the Regulatory and Capital Advance Agreements, leading to an underfunded operating account.
  • Recommended Follow-Up: Ensure reimbursement of $7,680 or secure HUD approval for future fund disbursements, as management has already requested this reimbursement.

Finding Text

Finding reference number: 2025-002 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 122-EE136-WAH-NP and 2001 Auditor non-compliance code: H – Unauthorized distribution of project assets Finding resolution status: Resolved Universe population size: The universe population size is not applicable to this finding Sample size information: The sample size information is not applicable to this finding Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $7,680 Statement of condition 2025-002: The Corporation paid entity costs of $7,680 from operating cash. Criteria: The Corporation shall not without the written approval of HUD disburse or payout any funds except for operation of the Property as provided in the Regulatory and Capital Advance Agreements. Effect: The Corporation is not in compliance with terms of the Regulatory and Capital Advance Agreements and the Property's operating account is underfunded by $7,680. Cause: Management oversight. Recommendation: The Sponsor should reimburse the Corporation $7,680 or management should request HUD approval for funds to be reimbursed from the reserve for replacement. Management's response: Management concurs with the finding and agrees with the auditor's recommendation. Management requested reimbursement from the reserve for replacement. HUD approval was received on February 25, 2026.

Corrective Action Plan

Name of auditee: Lime House Senior Housing, Inc. HUD auditee identification number: 122-EE136-WAH-NP Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended December 31, 2025 CAP prepared by Name: Ana Ponce Position: President Telephone number: 323-231-1104 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Finding 2025-002: The Corporation paid entity costs of $7,680 from operating cash. Comments on the Finding and Each Recommendation: The Sponsor should reimburse the Corporation $7,680 or management should request HUD approval for funds to be reimbursed from the reserve for replacement. Action(s) taken or planned on the finding: Management requested reimbursement from the reserve for replacement. HUD approval was received on February 25, 2026.

Categories

Subrecipient Monitoring Cash Management HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1227179 2025-001
    Material Weakness Repeat
  • 1227180 2025-002
    Material Weakness Repeat
  • 1227181 2025-001
    Material Weakness Repeat
  • 1227182 2025-002
    Material Weakness Repeat
  • 1227183 2025-001
    Material Weakness Repeat
  • 1227184 2025-002
    Material Weakness Repeat
  • 1227185 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $333,260
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $221,000