Finding Text
Finding No. 2022-003 ? Residual Receipts Federal Assistance Listing Number Name of Federal Program or Cluster 14.157 Supportive Housing for the Elderly Information on the Universe Population Size Residual Receipts activity for the year ended August 31, 2022. Sample Size Information N/A Identification of Repeat Finding Reference Number 2021-004 Criteria In accordance with the Entity?s regulatory agreement with HUD, only upon approval from HUD can the Entity withdraw funds from the residual receipts account. Statement of Condition The Entity withdrew $127,309 from the residual receipts account without the approval of HUD. Cause Funds for repayment of minimum capital investment to Sponsor and operating expenses were withdrawn from residual receipts and did not have the proper HUD approval for the withdrawals. Effect or Potential Effect The Entity is in violation of the requirements of its regulatory agreement. Auditor Non-Compliance Code C ? Unauthorized Withdrawals from the Residual Receipts Account Questioned Costs There were no known questioned costs. Perspective The finding represents an instance of management oversight due to change in management personnel positions. Repeat Finding Yes Recommendations We recommend that management evaluate its process and implement policies to mitigate the chances of withdrawing funds from the residual receipts without HUD approval. Views of Responsible Officials -from corrective action plan. Actions Taken or Planned Auditee agrees with this finding and has taken steps to prevent this from occurring in the future. A new Executive Director has taken over the responsibility for withdrawing funds as well as oversight from the Board of Directors. Auditee has been in discussion with HUD and will submit a letter with justification of withdrawals upon receipt of the notice of violation as requested from HUD. If accepted by HUD, this will clear this finding for the amount transferred during this fiscal year.