Finding 4869 (2023-001)

Finding #: 2023-001 Federal Grantor: U.S. Department of Housing and Urban Development AL # / Program : 14.157 - Supportive Housing for the Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: There were three replacement reserve disbursements during the year. Sample size information: Tests were performed on all three replacement reserve releases Criteria: The Supportive Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement signed by the Project requires the Project to obtain HUD approval prior to release from the reserve for replacements. Statement of Condition: The Project is not in compliance with the Supportive Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Cause: A deficiency in controls over compliance with the compliance requirements in the Supportive Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Effect or Potential Effect: The Project is not in compliance with the Supportive Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Auditor Non-Compliance Code: A - Unauthorized withdrawals from replacement reserve account Questioned Costs: $37,216 Reporting Views of Responsible Officials: Agree with finding. Context: The Project is not in compliance with the Supportive Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Recommendations: We recommend that Management review their controls over compliance with the compliance requirements in the Supportive Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: The replacement reserve was refunded the $37,216 on 8/11/2023. Controls have been put in place to prevent the unauthorized withdrawal of replacement reserve funds. Response Indicator Agree Completion Date: 8/11/2023 Response: The replacement reserve was refunded the $37,216 on 8/11/2023. Controls have been put in place to prevent the unauthorized withdrawal of replacement reserve funds.