Finding Text
Finding No. 2022-002; Federal Assistance Listing Number 99.999 Criteria Funds are to be spent only on approved property expenses. Condition During the year ended December 31, 2022, the project paid expenses in the amount of $447 on behalf of an affiliate. The amount due to the project as of December 31, 2022 is $447 and is recorded as a receivable from affiliate at year ended December 31, 2022. Cause Management did not follow its procedures to ensure that cash disbursements of project funds were limited to project operating costs prior to disbursement. Effect or Potential Effect The payments of $447 was not an authorized expense for the Property and if not corrected by Company could result in an unauthorized distribution of funds. Questioned Costs None Context The Company paid $447 of expenses for another affiliated entity; however, they caught this before year end and reversed the expense and recorded the receivable from that entity. Repeat Finding No Recommendation Management should implement procedures to ensure that bills paid are for the Property only prior to payment being made and should ensure the $447 is reimbursed from the affiliate. Auditor Noncompliance Code: B. Allowable Costs; Z. Other Finding Resolution Status: Resolved Views of Responsible Officials and Planned Corrective Actions The receivable was repaid in March 2023. REACH will make process improvement to prevent this from re-occurring by raising more awareness with the fiscal staff to better understand the procedures and operational agreements and the uniform guidance.