Finding 375432 (2022-002)

Significant Deficiency
Requirement
A
Questioned Costs
$1
Year
2022
Accepted
2024-03-11

AI Summary

  • Core Issue: The Corporation made an unauthorized payment of $16,742 to LAHD without HUD approval.
  • Impacted Requirements: This violates the Regulatory Agreement, which requires prior HUD approval for fund disbursements.
  • Recommended Follow-up: The Corporation should continue to seek HUD approval for reimbursement and ensure future payments comply with regulations.

Finding Text

Finding reference number: 2022-002 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 2001 Auditor non-compliance code: H – Unauthorized distribution of project assets Finding resolution status: In process Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $16,742 Statement of condition 2022-002: The Corporation made a payment to LAHD in the amount of $16,742. The payment does not meet HUD's criteria of eligible Property expenses and the Corporation did not obtain HUD approval. Criteria: The Corporation shall not without the written approval of HUD disburse or payout any funds except for operation of the Property as provided in the Regulatory and Capital Advance Agreement. In accordance with the applicable agreements, the annual payments to LAHD are required to be paid from entity sources with prior approval from HUD. Effect: The Corporation is not in compliance with terms of the Regulatory Agreement and the Property's operating account is underfunded by $16,742. Cause: The Corporation was billed by LAHD and processed the payment without prior approval from HUD. Recommendation: The Corporation should request HUD approval for reimbursement from the residual receipts fund and deposit into the Property's operating account. Management's response: Management concurs with the finding and the auditor's recommendation. Management has requested approval from HUD. As of the report date, no response has been received.

Corrective Action Plan

Finding 2022-002: The Corporation made a payment to LAHD in the amount of $16,742. The payment does not meet HUD's criteria of eligible Property expenses and the Corporation did not obtain HUD approval. Comments on the Finding and Each Recommendation: The Corporation should request HUD approval for reimbursement from the residual receipts fund and deposit into the Property's operating account. Action(s) taken or planned on the finding: Management has requested approval from HUD. As of the report date, no response has been received.

Categories

Questioned Costs Cash Management HUD Housing Programs Subrecipient Monitoring

Other Findings in this Audit

  • 375431 2022-001
    Significant Deficiency
  • 375433 2022-003
    Significant Deficiency
  • 375434 2022-001
    Significant Deficiency
  • 375435 2022-002
    Significant Deficiency
  • 375436 2022-003
    Significant Deficiency
  • 951873 2022-001
    Significant Deficiency
  • 951874 2022-002
    Significant Deficiency
  • 951875 2022-003
    Significant Deficiency
  • 951876 2022-001
    Significant Deficiency
  • 951877 2022-002
    Significant Deficiency
  • 951878 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $221,000
14.157 Supportive Housing for the Elderly $209,752