Finding 22691 (2022-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-05
Audit: 22068
Organization: Network Housing 2005, Inc. (OH)

AI Summary

  • Core Issue: The Organization did not make all required monthly deposits into the replacement reserve account, missing 2 out of 12 deposits.
  • Impacted Requirements: The regulatory agreement mandates 12 monthly deposits of $716, leading to an underfunding of $5,728 for the fiscal year.
  • Recommended Follow-Up: Ensure all required deposits are made moving forward and improve monitoring of cash requirements by December 31, 2023.

Finding Text

Finding Type Significant deficiency in internal control over compliance Title and CFDA Number of Federal Program 14.181 U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) Finding Resolution Status In Process Information on Universe and Population Size The population includes all required deposits to the replacement reserve for fiscal year 2022. Sample Size Information N/A Identification of Repeat Finding and Finding Reference Number N/A Criteria The Organization should have made 12 monthly deposits of $716 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition The Organization failed to make the required reserve for replacements deposits in the current fiscal year. Cause The Organization failed to monitor the cash requirements of the reserve for replacement account as specified by the regulatory agreement. Effect or Potential Effect The replacement reserve account was underfunded in the current fiscal year by $5,728. Auditor Noncompliance Code N Reserve for replacements deposits Reporting Views of Responsible Officials Management agrees with the finding as reported. Context During testing of required deposits to the reserve for replacement account, it was noted the Organization only made 10 of the required 12 monthly deposits, causing the account to be underfunded by $5,728. Recommendation All required deposits should be made in accordance with the regulatory agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator Agree Completion Date December 31, 2023 Response Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance.

Corrective Action Plan

Finding Number: 2022-002 Condition: The Organization failed to make the required reserve for replacements deposits in the current fiscal year. Planned Corrective Action: Management agrees with the finding as reported. Management has instituted procedural changes to ensure that all required deposits are made monthly. Additionally, management has taken steps to deposit all delinquent deposits. Contact person responsible for corrective action: Paul Anderson, CFO Anticipated Completion Date: 12/31/2023

Categories

HUD Housing Programs Internal Control / Segregation of Duties Reporting Significant Deficiency

Other Findings in this Audit

  • 22692 2022-003
    Significant Deficiency
  • 599133 2022-002
    Significant Deficiency
  • 599134 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.53M
14.239 Home Investment Partnerships Program $230,670