Finding 478700 (2022-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2024-07-17

AI Summary

  • Core Issue: Missing supporting documentation for disbursements led to noncompliance with HUD regulations.
  • Impacted Requirements: All disbursement requests must have proper documentation as per HUD Handbook 4370.2 REV-1.
  • Recommended Follow-up: Management should implement a system to ensure all disbursements have the necessary supporting documentation.

Finding Text

Finding 2022-002 - U.S. Department of Housing and Urban Development, Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate, CFDA #14.135 Statement of Condition: During the year ended December 31, 2022, supporting documentation was not available for all requested disbursements. Criteria: The HUD Handbook 4370.2 REV-1, Chapter 2 Section 12 states a request for a check must have supporting documentation (i.e., invoice itemizing amount requested with an authorized signature) in order for approval to be obtained to make the disbursement. Checks must be approved by an individual authorized to approve checks. Effect: Noncompliance with HUD regulations. Cause: Management oversight. Context: A sample of forty cash disbursements totaling $74,421 were tested to determine if the cash disbursements were in accordance with HUD Handbook 4370.2. Of the forty cash disbursements, one cash disbursement of $1,022 tested did not have supporting documentation, therefore were unable to be tested for compliance with HUD Handbook 4370.2 and deemed noncompliant. By extrapolating our identified error rate on cash disbursements tested that were noncompliant (1.38%) over the total population of cash disbursements for the year ended December 31, 2022 of $935,047, $12,904 of cash disbursements could be noncompliant based on the above error rate. Questioned Costs: $12,904 Recommendation: We recommend that management ensure supporting documentation is maintained for all disbursements from project operations. Views of Responsible Officials and Corrective Action Plan: Management acknowledges the requested disbursement did not have supporting documentation available. Management will ensure supporting documentation is maintained for all disbursements from project operations.

Corrective Action Plan

Mount Sinai Foundation, Incorporated 703 Blue Street Fayetteville, North Carolina 28301 CORRECTIVE ACTION PLAN March 11, 2024 U.S. Department of Housing and Urban Development Five Points Plaza Building 40 Marietta Street Atlanta, Georgia 30303 Mount Sinai Foundation, Incorporated respectfully submits the following Corrective Action Plan for the year ended December 31, 2022. Bernard Robinson & Company, L.L.P. 1501 Highwoods Blvd., Suite 300 Post Office Box 19608 Greensboro, North Carolina 27419-9608 The findings for the year ended December 31, 2022 Schedule of Findings and Questioned Costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS - Financial Statement Audit and Federal Award Program Audits Finding 2022-002 - U.S. Department of Housing and Urban Development, Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate (Sections 221d(3) and (4) Multifamily - Market Rate Housing), CFDA #14.135 Recommendation: We recommend that management ensure supporting documentation is maintained for all disbursements from project operations. Action Taken: We agree with Finding 2022-002 and the recommendation described in the accompanying schedule of findings and questioned costs. Management will ensure supporting documentation is maintained for all disbursements from project operations. If HUD has questions regarding this corrective action plan, please call (803) 873-2377. Sincerely yours, Dwayne Legrant President Omni Property Management and Development Managing Agent

Categories

Questioned Costs HUD Housing Programs

Other Findings in this Audit

  • 478699 2022-001
    Material Weakness Repeat
  • 478701 2022-003
    Material Weakness Repeat
  • 478702 2022-004
    - Repeat
  • 478703 2022-005
    - Repeat
  • 478704 2022-006
    Material Weakness
  • 1055141 2022-001
    Material Weakness Repeat
  • 1055142 2022-002
    Material Weakness Repeat
  • 1055143 2022-003
    Material Weakness Repeat
  • 1055144 2022-004
    - Repeat
  • 1055145 2022-005
    - Repeat
  • 1055146 2022-006
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $7.10M
14.182 Section 8 New Construction and Substantial Rehabilitation $709,576