Finding Text
Condition: The Organization withdrew $12,756 when only $12,256 was approved.
Criteria: The Regulatory Agreement with HUD states Disbursements from such fund, whether
for the purpose of effecting replacement of structural elements and mechanical equipment of the
project for any other purpose, may be made only after the consent in writing of HUD. In the
event of a default in the terms of the mortgage, HUD may demand the full or partial application
of the balance in such fund to be amount due on the mortgage debt.
Effect: $500 was withdrawn without authorization.
Cause: Management requested $12,756 and HUD only approved $12,256. Management
withdrew the $500 erroneously.
Recommendation: We recommend the Organization repay the $500 that was not approved.
Auditee’s Response: The Organization will repay the $500 that was unauthorized.