FAC Explorer

Finding 2722 (2022-001)

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Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-11-29
Audit: 4657
Organization: Homeless No More, Inc. 122-Hd085-Wdd-Np (CA)
Auditor: Suchan and Associates An Accountancy Corporation

AI Summary

  • Core Issue: The Project failed to make timely monthly deposits into the replacement reserve account, missing all 12 required deposits for 2022.
  • Impacted Requirements: The Project did not comply with HUD's regulatory agreement, resulting in an underfunded account by $1,500.
  • Recommended Follow-Up: The Project should promptly fund the shortage and ensure timely monthly deposits moving forward, as agreed in the corrective action plan.

Finding Text

Condition: The Project did not make timely replacement reserve deposits for 12 of the 12 required monthly deposits for the calendar year ended December 2022, as required by the regulatory agreement. Criteria: Per the regulatory agreement, HUD requires the Project to make equal monthly deposits of $750 for an annual total of $9,000. Effect: For the year ended December 31, 2022 the replacement reserve account is underfunded. A total of $7,500 was deposited into the replacement reserve account for the year 2022 leaving a shortage of $1,500. The Project was not compliant with the HUD regulatory agreement to deposit timely monthly required deposits into the replacement reserves account. Questioned Costs: $ -- Context: All activity for the replacement reserve account was traced and it was determined that the required monthly deposits were not timely deposited. It was determined that 12 out of the 12 monthly deposits were not timely deposited in accordance with the regulatory agreement. Due to the unexpected administrative burden caused by COVID the Project did not timely deposit the monthly replacement reserves as required by the regulatory agreement. Cause: The Project was making adjustments to handle the administrative burden that occurred due to COVID, which affected its policies and procedures. Recommendation: The Project should fund the shortage as soon as possible and make the required timely monthly deposits in accordance with the regulatory agreement. View of Responsible Officials and Planned Corrective Actions: The Project agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report. Response: The late deposits were caught up by May 2023. The Project did not make all 12 monthly deposits of $750 for an annual contribution of $9,000 to the replacement reserve account as required by the regulatory agreement. During 2022, 2 deposits of $750 were catch up deposits from 2021. 10 deposits were made for the year 2022. Replacement reserve deposits were short $1,500 for the calendar year ended December 31, 2022.

Corrective Action Plan

Department of Housing and Urban Development Homeless No More, Inc., HUD Project No. 122-HD085-WDD-NP, respectfully submits the following Corrective Action Plan for the year ended December 31, 2022. Name and address of independent public accounting firm: Suchan & Associates, An Accountancy Corporation, 8588 Utica Ave. Suite 100, Rancho Cucamonga, California 91730. Audit Period: January 1, 2022 through December 31, 2022 The finding from the 2022 Schedule of Findings and Questioned Costs is discussed below. The finding is numbered consistent with the number assigned in the schedule. Section A of the Schedule, Summary of Audit Results does not include findings and is not addressed. FINDINGS-FINANCIAL STATEMENTS AUDIT None FINDINGS AND QUESTIONED COSTS-MAJOR FEDERAL AWARD PROGRAMS AUDIT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING NO. 2022-001 Section 811 (Capital Advance Loan), CFDA No. 14.181 Recommendation: The Project should fund the replacement reserves shortage as soon as possible and make the required monthly deposits in accordance with the regulatory agreement. Action Taken: Deposits to the replacement reserve account were brought up to date as of May 2023. Continued $750 monthly deposits will be made in accordance with the regulatory agreement. If you have any questions regarding the plan, please call Dan O’Brien, Chief Financial Officer (213) 251-3410. Sincerely, Dan O’Brien Chief Financial Officer

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $123,490