Finding 393257 (2023-002)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-04-15

AI Summary

  • Core Issue: Unauthorized disbursements of $6,011 were made from the reserve fund.
  • Impacted Requirements: Withdrawals from the reserve fund must be authorized by HUD; none were in fiscal year 2023.
  • Recommended Follow-Up: The Project should return the withdrawn funds to the reserve when financially feasible.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Unauthorized disbursements from the reserve fund were made. Condition: During the 2023 audit, we noted that the Project had made unauthorized withdrawals from the reserve fund. Questioned Costs: $6,011 in unauthorized withdrawals were made. Context: Through audit compliance testing procedures, it was identified there were no withdrawals made during fiscal year 2023 authorized by HUD, however through additional procedures over the reserve there were three withdrawals identified. Cause: Due to cash constraints caused by rental income delays the Project was required to make withdrawals to continue operations. Effect: The Project did not make authorized withdrawals. Repeat Finding: None Recommendation: We recommend the Project return the withdrawn funds back to the reserve funds when the funds allow. Views of Responsible Officials: There is no disagreement with the audit finding. Management has received the delayed rental income payments and is working to return the funds.

Corrective Action Plan

Unauthorized disbursements from the reserve fund were made. Recommendation: CLA recommends the Project return the withdrawn funds back to the reserve funds when the funds allow. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: Management has received the delayed rental income payments and is working to return the funds. Name of the contact person responsible for corrective action: Matthew Fontaine, Controller DeMarco Management Corp. Planned completion date for corrective action plan: April 1, 2024

Categories

Questioned Costs HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 393256 2023-001
    Significant Deficiency
  • 393258 2023-001
    Significant Deficiency
  • 393259 2023-002
    Significant Deficiency
  • 969698 2023-001
    Significant Deficiency
  • 969699 2023-002
    Significant Deficiency
  • 969700 2023-001
    Significant Deficiency
  • 969701 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $133,783