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.