2022 ?1 Restricted Fund Usage Questioned Cost: $9,000 Condition: Management failed to utilize restricted funds for the purpose in which they were designated. Criteria: The management company expended $9,000 of funds restricted for use in furnishing tenant common areas and the management office, on daily operating expenses. Cause: Site managers did not expend funds for their intended use. Effect: Restricted funds were not spent appropriately and therefore, should be returned to donor. Recommendation: I recommend management comply with all donor restrictions. Management Response: - Initially the funds were not restricted. The funds were earned by the property because the property was used as a set for a movie. - The money did not come from the Board. The money was generated by the property and is considered to be other income. Given the financial needs of the property there was no way that funds could be set aside for the operations. The Debt owed to the Management Company as of 12/31/2022 was $59,401. Given the severe cash flow issues at the property all resources had to be directed to resolve the financial situation of Boyd Manor. The funds were used for the benefit of Boyd Manor. The management company was also owed $59,401.