Finding 394617 (2023-002)

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Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-04-25

AI Summary

  • Core Issue: The Project lacks proper fidelity bond insurance coverage as mandated by the capital advance agreement.
  • Impacted Requirements: Coverage was not in effect for the entire year and excluded key officials, leading to noncompliance.
  • Recommended Follow-Up: Ensure the correct fidelity bond insurance is secured immediately, with a completion target of 12/31/24.

Finding Text

Schedule reference number 2023-002. Title and AL Number of Federal Program: Supportive Housing for the Elderly, AL 14.157 Type of finding: Compliance Resolution status: In Progress Population size: N/A Sample size: N/A Repeat finding: No Criteria: The Project did not have the proper insurance coverage as required by the capital advance agreement. Condition: The fidelity bond insurance coverage for the property was not in effect the entire year and excluded the apartment manager, board chair, board vice-chair, eight board members, board treasurer and CFO. Cause: The Project obtained fidelity bond insurance coverage effective February 27, 2023, however, the policy explicitly excluded certain officials and employees required by the capital advance agreement. Effect: The Property did not have adequate fidelity bond insurance coverage required by their regulatory agreement and had a lapse in other required insurance coverage. Noncompliance code: Z. Other Questioned cost: None Reporting views of officials: Management agrees with the finding. Context: This was noted during the audit. Recommendation: The proper coverage for fidelity bond insurance as required by the capital advance agreement should be put in place for the Project immediately. Auditors' summary of auditee's comments: The new management company understands the requirements and are in the process of obtaining all required coverage. Completion date: 12/31/24 Response: Management is in the process of obtaining all required insurance coverage. Corrective Action: In progress

Corrective Action Plan

During the audit the Project did not have the proper insurance coverage as required by the capital advance agreement for the entire year. The Project obtained fidelity bond insurance coverage effective February 27, 2023, however the policy explicitly excluded certain officials and employees required by the capital advance agreement. Response: The new management company understands the requirements and are in the process of obtaining all required coverage.

Categories

Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $226,679