Finding 1228010 (2025-004)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2025
Accepted
2026-08-26
Audit: 409856
Organization: Arirang Housing,inc. (CA)

AI Summary

  • Core Issue: The Corporation improperly paid $21,398 in costs without HUD's written approval, violating the Regulatory Agreement.
  • Impacted Requirements: Non-compliance with terms of the Regulatory and Capital Advance Agreements, leading to an underfunded operating account.
  • Recommended Follow-up: The Corporation should seek retroactive HUD approval for the payments or request reimbursement from the Board of Directors.

Finding Text

Finding reference number: 2025-004 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 122-EH518-WAH-NP and 1993 Auditor non-compliance code: H – Unauthorized distribution of project assets Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the 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: $21,398 Statement of condition 2025-004: The Corporation paid entity costs of $21,398 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 Agreement and Capital Advance Agreements and the Property's operating account is underfunded by $21,398. This amount is included on the computation of surplus cash, distributions, and residual receipts so not to understate the deposit due to the residual receipts account. Cause: Management oversight. Recommendation: The Corporation should request retroactive HUD approval to make the payments or request reimbursement from the Board of Directors. Management's response: Management concurs with the finding and recommendation. Management has requested approval from HUD. As of the report date, no response has been received.

Corrective Action Plan

Name of auditee: Arirang Housing, Inc. HUD auditee identification number: 122-EH518-WAH-NP Name of audit firm: Dauby O'Connor & Zaleski, LLC Period covered by the audit: Year ended June 30, 2025 CAP prepared by Name: Noel Sweitzer Position: President, HDSI Management, Inc. Telephone number: (323) 231-1104 Current Findings on the Schedule of Findings, Questioned Costs, and Recommendations Statement of condition 2025-004: The Corporation made payments on entity expenses in the amount of $21,398 and did not obtain the required HUD approval. Comments on the Finding and Each Recommendation: The Corporation should request retroactive HUD approval to make the payments or request reimbursement from the Board of Directors. Action(s) taken or planned on the finding: Management has requested approval from HUD. As of the report date, no response has been received.

Categories

Cash Management HUD Housing Programs Subrecipient Monitoring

Other Findings in this Audit

  • 1228003 2025-001
    Material Weakness Repeat
  • 1228004 2025-002
    Material Weakness Repeat
  • 1228005 2025-003
    Material Weakness Repeat
  • 1228006 2025-004
    Material Weakness Repeat
  • 1228007 2025-001
    Material Weakness Repeat
  • 1228008 2025-002
    Material Weakness Repeat
  • 1228009 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $167,794