Finding Text
Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for the Elderly (Section 202) Assistance Listing Number: 14.157 Federal Award Identification Number and Year: N/A Name of Pass-through Entity (if applicable): N/A Criteria: Loans are not permitted to be made from Project cash without prior authorization from HUD. Condition: During the year ended December 31, 2025, the Project paid expenses in the amount of $384 on behalf of an affiliate from Project cash without HUD approval. The amount due to the Project as of December 31, 2025 is $384. Cause: Procedures were not in place to ensure that cash disbursements of Project funds were limited to Project operating costs. Effect or potential effect: The payments of $384 were unauthorized loans and therefore considered to be questioned costs. Question costs: $384 Context: The project is billed for a shared invoice, and was not reimbursed from the affiliates timely. Identification as a repeat finding: yes Recommendation: Management has already reimbursed the Corporation. Management should revisit the procedures in place to ensure payments of this nature, being joint invoices, are either approved by HUD or not made in the future from the Corporation, but from the Sponsor. Compliance Code: G. Unauthorized loans from project assets Finding Resolution status: Resloved Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation as the payment was processed in error. Management implemented an additional approval control to prevent one project from paying expenses on behalf of another project or affiliate going forward. Management will continue to monitor compliance with these procedures.