Finding 369843 (2021-008)

Material Weakness
Requirement
B
Questioned Costs
-
Year
2021
Accepted
2024-02-20
Audit: 291369
Organization: Trinity Community Housing CORP (IL)
Auditor: Icl LLC

AI Summary

  • Core Issue: The Project lacks proof of fidelity bond coverage for at least two months’ gross potential income as required by HUD guidelines.
  • Impacted Requirements: This violates the bonding requirement outlined in HUD Handbook 4381.5, preventing the necessary compliance testing.
  • Recommended Follow-Up: The Project should reach out to its fidelity bond company to confirm coverage for the required amount during the audit period.

Finding Text

Criteria: The owner or management agent must obtain a fidelity bond in accordance with HUD Handbook 4381.5 The Management Agent Handbook Section 2. Procedures For HUD Approval of Management Agent 2.14 Bonding Requirement for Agents. The owner or the management agent must be insured for at least the value of two months’ gross potential income for the project. Condition: During the testing of fidelity bond insurance coverage, we noted that the Project could not provide support for fidelity bond coverage for at least the value of two months’ gross potential income for the Project. Cause: Due to staff turnover, the fidelity bond coverage for the proper coverage of two months’ gross potential income could not be located. Effect: The test to determine whether the owner has obtained a fidelity bond in accordance with Chapter 2.14 of HUD Handbook 4381.5 could not be performed. Recommendation: We recommend that the Project contact its fidelity bond company to determine if the Project has coverage for two months’ gross potential income during the audit period. Views of Responsible Officials and Corrective Action Plan: No disagreements with the audit finding.

Corrective Action Plan

Corrective Action Plan: The Corporation plans has hired a management agent company that will ensure that fidelity bond is available for examination purposes to determine that the Project has the proper fidelity bond coverage. Responsible party: Ken Dickerson, Chairman Planned completion date for corrective action plan: Already remediated.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 369836 2021-001
    Material Weakness
  • 369837 2021-002
    Material Weakness Repeat
  • 369838 2021-003
    Material Weakness
  • 369839 2021-004
    Material Weakness
  • 369840 2021-005
    Material Weakness
  • 369841 2021-006
    Material Weakness Repeat
  • 369842 2021-007
    Material Weakness
  • 369844 2021-009
    Material Weakness
  • 369845 2021-010
    Material Weakness
  • 369846 2021-011
    Material Weakness
  • 369847 2021-012
    Material Weakness Repeat
  • 369848 2021-013
    Material Weakness Repeat
  • 369849 2021-014
    Material Weakness
  • 369850 2021-015
    Material Weakness
  • 946278 2021-001
    Material Weakness
  • 946279 2021-002
    Material Weakness Repeat
  • 946280 2021-003
    Material Weakness
  • 946281 2021-004
    Material Weakness
  • 946282 2021-005
    Material Weakness
  • 946283 2021-006
    Material Weakness Repeat
  • 946284 2021-007
    Material Weakness
  • 946285 2021-008
    Material Weakness
  • 946286 2021-009
    Material Weakness
  • 946287 2021-010
    Material Weakness
  • 946288 2021-011
    Material Weakness
  • 946289 2021-012
    Material Weakness Repeat
  • 946290 2021-013
    Material Weakness Repeat
  • 946291 2021-014
    Material Weakness
  • 946292 2021-015
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.81M
14.195 Section 8 Housing Assistance Payments Program $1.01M