FAC Explorer

Finding 15951 (2022-002)

-
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-28
Audit: 21384
Organization: Pacific Housing Oahu Corporation - Elderly Residence (HI)
Auditor: N&k CPAS INC

AI Summary

  • Core Issue: The Company withdrew $12,817 from the replacement reserve account without HUD approval.
  • Impacted Requirements: This action violates the Capital Advance Program Regulatory Agreement, leading to an underfunded reserve.
  • Recommended Follow-Up: Transfer $12,817 from the operating cash account to the reserve and ensure proper documentation of HUD authorizations is maintained.

Finding Text

Criteria: The Capital Advance Program Regulatory Agreement requires that the replacement reserve account be maintained for funding extraordinary maintenance and repair and replacement of capital items. Monthly deposits in an amount required by HUD must be made with disbursements made only with the approval of HUD. Condition: The Company made an unauthorized withdrawal of $12,817 from the replacement reserve account. Cause: Documentation of a HUD authorization for the withdrawal was not maintained by the Company. Effect: The Company is not in compliance with the Capital Advance Program Regulatory Agreement and the replacement reserve is underfunded by $12,817. $ -- Identification as a Repeat Finding, if applicable: Not applicable. Recommendation Management should transfer $12,817 from the operating cash account to the replacement reserve fund and maintain documentation of HUD authorizations. Views of Responsible Officials and Planned Corrective Action The Company agrees with the finding and the recommendation. See Part V Corrective Action Plan

Corrective Action Plan

2. Ref. No. 2022-002: Ensure Only Authorized Withdrawals are Disbursed from the Replacement Reserve Account Recommendation: Management should transfer $12,817 from the operating cash account to the replacement reserve fund. Action Taken: The Company has removed Locations/MontPac as the property managers on March 31, 2023 and hired Bob Tanaka, Inc. as their replacement. The Company has instructed Bob Tanaka, Inc. to transfer $12,817 from the operating bank account to the replacement reserve bank account. The Company has also instructed Bob Tanaka, Inc. to obtain HUD authorization prior to making transfers from the replacement reserve account. Contact person: Patrick Delaney (808) 523-5681, ext. 693 Anticipated Completions Date: Completed.

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $900,024
14.157 Supportive Housing for the Elderly $136,002