Finding 41640 (2022-001)

Significant Deficiency Repeat Finding
Requirement
A
Questioned Costs
-
Year
2022
Accepted
2022-11-29
Audit: 38931
Organization: Casa Otonal Housing Corporation (CT)
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: The Organization is restricted from lending Project funds to affiliates, but prior ineligible costs led to a loan to Casa Otonal, Inc.
  • Impacted Requirements: Compliance with the Regulatory Agreement and proper use of Project funds are at risk due to this ongoing issue.
  • Recommended Follow-Up: The Board of Directors should continue collaborating with HUD to resolve the repayment situation with Casa Otonal, Inc.

Finding Text

Finding No. 2022-001 (repeats 2009-1) Federal Assistance Listing #14.134 Mortgage Insurance - Rental Housing Federal Assistance Listing #14.195 Section 8 Housing Assistance Payments Criteria The Organization is restricted by the Regulatory Agreement as to the use of Project funds, which prohibits the loan of Project funds to an affiliate. Condition As a result of the HUD OIG audit dated August 9, 2009, HUD quantified ineligible costs that are required to be repaid by Casa Otonal, Inc., an affiliate of Casa Otonal Housing Corporation. The Organization is working with both the local HUD office and Casa Otonal, Inc. to work out the repayment as Casa Otonal, Inc. has limited assets available for repayment. Cause Prior year ineligible costs resulted in a loan to an affiliate. Effect or Potential Effect Prior year ineligible costs resulted in a loan to an affiliate. Questioned Costs None Context There were no current year questioned costs or unauthorized loans. Recommendation We recommend that the Board of Directors continues to work with HUD to resolve the outstanding balance. Auditor Noncompliance Code Z ? Other ? prior year unauthorized loans from Project funds Finding Resolution Status: In process Views of Responsible Officials and Planned Corrective Actions The management agent is not involved in the resolution of this finding. The Board of Directors is working directly with HUD as the finding occurred prior to engaging the current management company.

Categories

HUD Housing Programs Eligibility Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 41638 2022-001
    Significant Deficiency Repeat
  • 41639 2022-002
    Material Weakness
  • 41641 2022-002
    -
  • 618080 2022-001
    Significant Deficiency Repeat
  • 618081 2022-002
    Material Weakness
  • 618082 2022-001
    Significant Deficiency Repeat
  • 618083 2022-002
    -

Programs in Audit

ALN Program Name Expenditures
14.134 Mortgage Insurance_rental Housing $5.92M
14.195 Section 8 Housing Assistance Payments Program $1.76M
14.191 Multifamily Housing Service Coordinators $29,260