Finding 21416 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-04-04

AI Summary

  • Core Issue: The Corporation over withdrew $18,000 from the replacement reserve account, violating HUD compliance requirements.
  • Impacted Requirements: Disbursements from the replacement reserve must be approved by HUD, and the Corporation failed to adhere to this by withdrawing funds that were already disbursed.
  • Recommended Follow-Up: Ensure the $18,000 is repaid to the replacement reserve account, which has already been done, and implement new procedures to prevent future compliance issues.

Finding Text

Finding 2022-001: Considered a significant deficiency in internal control over compliance. Federal Program: Supportive Housing for the Elderly (Section 202) ALN #: 14.157 Federal agency: U.S. Department of Housing and Urban Development (HUD) Criteria: In order to comply with U.S. Department of Housing and Urban Development requirements, disbursements form the replacement reserve account must be approved by HUD. Condition: During 2022, the Corporation disbursed $18,000 from the replacement reserve that had already been previously withdrawn from the account. As a result, the Corporation will be required pay back the disbursement with a deposit to the replacement reserve account in the amount of $18,000. Questioned costs: $18,000 Cause: On July 9, 2021, the Corporation received a $33,000 approval from HUD for a fire protection system project. During 2022, upon completion of the project, the Corporation withdrew the $33,000 that was previously approved. On November 23, 2022, the Corporation received a $19,609.96 withdrawal approval from HUD, however, $18,000 of this approved amount related to the previously approved and disbursed fire protection system project. Effect: The Corporation over withdrew the replacement reserve account by $18,000. Recommendation: The Corporation should pay back the $18,000 with a deposit to the replacement reserve account. Corporation?s Response: The Corporation concurs with the facts of this finding, has already paid back the $18,000 to the replacement reserve account during 2023, and is implementing procedures to prevent this in the future.

Categories

Questioned Costs HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 21415 2022-001
    Significant Deficiency
  • 597857 2022-001
    Significant Deficiency
  • 597858 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $112,148