Finding 394619 (2023-001)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-04-25

Audit: 304518

Organization: Turtle Woods Corporation 023-Ee021 (MA)

Auditor: Cohnreznick LLP

AI Summary

Answer: $50,000 intended for reserve accounts was not transferred and was instead used for project operations.
Trend: This error indicates a lack of oversight in managing reserve deposits and compliance with HUD regulations.
List: Follow up by reviewing transfer procedures, ensuring proper approvals for fund usage, and implementing checks to prevent future errors.

Finding Text

Management noted that during transfer of replacement reserve deposits between banks an error was made that resulted in $50,000 not being transferred to the new reserve accounts. The $50,000 was retained in the project operating account and used to pay for project operations without HUD approval.

Corrective Action Plan

Management agrees that the $50,000 of questioned costs must be returned to the reserve for replacement account. In order to replenish the reserve balance and remediate the finding, management will be depositing an additional $10,000 per month to the reserve from project operations to be made over the course of five months (March 2024 to July 2024). The first $10,000 deposit was made on March 18, 2024. Planned deposits for the remaining $40,000 still owed will be made on the payment schedule as follows: April 15, 2024, May 15, 2024, June 15, 2024, and July 15, 2024.

Other Findings in this Audit

971061 2023-001

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
14.157	Supportive Housing for the Elderly	$496,943