Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly
Assistance Listing Number: 14.157
Federal Award Identification Number and Year: 075-EE017-WAH - 2023
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Title 24 U.S. Code of Federal Regulations, Section 891.400 and the
Corporation's Regulatory Agreement require the Corporation to request and obtain approval from HUD
for all withdrawals from the residual receipts fund.
Condition: The Corporation withdrew funds from the residual receipts account in order to remit back
HUD, however the management company paid HUD on behalf of the Corporation. Proper approval was
not obtained to withdraw the funds used to pay back the management company.
Questioned costs: $91,063
Context: Noncompliance was identified as a result of sampling withdrawals from the residual receipts
account.
Cause: The Corporation withdrew funds from the residual receipts account to repay the management
company, however existing controls and processes did not request approval from HUD prior to
withdrawing the funds.
Effect: The Corporation is not in compliance with program requirements.
Recommendation: We recommend that management obtain approval from HUD prior to making a
withdraw from the residual receipts account.
Views of responsible officials: Management agrees with the finding.