Finding Text
Department of Housing and Urban Development Finding No. 2022-001 Unauthorized Distributions; Assistance Listing Number 14.157 Supportive Housing for the Elderly Criteria: Per the HUD Regulatory Agreement, the Corporation may not make payments from project cash without the approval of HUD. Condition: The Corporation incurred and paid the Sponsor fees totaling $45,000 which represents $15,000 for each of the years of 2021, 2020 and 2019. Cause: The Corporation believed the fees were appropriate based on their understanding of the facts and circumstance. Effect or Potential Effect: The Corporation is not in compliance with HUD laws and regulations. Questioned costs: $45,000 Context: In 2022, it was brought to management's attention by HUD that the fees disbursed to the Sponsor for 2021, 2020, and 2019 would be required to be repaid to the Project. Recommendation: The Sponsor should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Identification of Repeat Finding: N/A Auditor Noncompliance Code: Unauthorized distribution of project assets. Finding Resolution Status: Resolved. During the year ended December 31, 2022, the Sponsor returned the requested funds to the Project. Views of Responsible Official: The Sponsor has repaid the fees to the Project as requested by HUD.