Finding 194837 (2022-001)

-
Requirement
AF
Questioned Costs
$1
Year
2022
Accepted
2023-05-25
Audit: 178616
Organization: Elders Lodge Corporation (MN)

AI Summary

  • Core Issue: The Organization withdrew $18,940 from the replacement reserve fund without obtaining required HUD approval.
  • Impacted Requirements: HUD mandates that approval must be secured before using funds from the replacement reserve.
  • Recommended Follow-Up: The Organization should ensure future requests for HUD approval are submitted timely to avoid similar issues.

Finding Text

2022 ? 001 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program Name: Supportive Housing for the Elderly (Section 202 Capital Advance) Assistance Listing Number: 14.157 Award Period: January 1, 2022 through December 31, 2022 Type of Finding: ? Other Matters Criteria or specific requirement: The Organization is required to receive HUD Approval prior to using funds in the replacement reserve fund. Condition: During our testing, we noted the Organization did not receive HUD Approval prior to withdrawal of replacement reserve funds for a capital expenditure. Although email approval was provided for the original bid, the required HUD Approval form was not submitted to HUD. Questioned costs: $18,940 Context: During our testing, it was noted that the Organization did not receive proper HUD approval for a replacement reserve withdrawal. Cause: The Organization was unaware that additional approval was needed prior to withdrawing funds. Effect: The project withdrew funds without proper HUD approval. Repeat Finding: Not a repeated finding. Recommendation: We recommend the Organization submit the request for HUD approval immediately. Views of responsible officials: There is no disagreement with the audit finding. The organization has submitted the request for approval in March 2023.

Corrective Action Plan

Elders Lodge Corporation respectfully submits the following corrective action plan for the year ended December 31, 2022. Audit period: January 1, 2022 ? December 31, 2022 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS?FINANCIAL STATEMENT AUDIT There were no findings in the current year that require a corrective action plan. FINDINGS?FEDERAL AWARD PROGRAMS AUDITS U.S. Department of Housing and Urban Development 2022-001 Section 202 Supportive Housing for the Elderly ? CFDA No. 14.157 Recommendation: Although email approval was received from the United States Department of Housing and Urban Development (HUD) representative prior to withdrawing the funds from the replacement reserve, the formal HUD required form was not submitted. In future requests, the formal HUD form will be submitted to the HUD Representative as well. Also, Elders Lodge Corporation should ensure that adequate internal controls are implemented to properly document and request authorization for use of replacement reserve funds. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management Agent submitted proper HUD authorization request form to the HUD representative for review. Name(s) of the contact person(s) responsible for corrective action: Diane Nelson, Management Agent Planned completion date for corrective action plan: March 2023 If the there are questions regarding this plan, please call Diane Nelson at 651-523-1217.

Categories

Questioned Costs Procurement, Suspension & Debarment HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $299,902
14.239 Home Investment Partnerships Program $200,000