Finding 499866 (2023-001)

Material Weakness Repeat Finding
Requirement
C
Questioned Costs
$1
Year
2023
Accepted
2024-09-30
Audit: 322738
Organization: Thompson House Inc. (MA)

AI Summary

  • Core Issue: The Replacement Reserve account is underfunded by $91,000 due to missed monthly deposits.
  • Impacted Requirements: Monthly deposits of $5,000 for 2022 and $6,000 for 2023 were not consistently made.
  • Recommended Follow-Up: Ensure the remaining $22,000 is deposited promptly and maintain a monthly deposit process moving forward.

Finding Text

2023-001 Federal agency: Department of Housing and Urban Development Federal program: Section 811 - Supportive Housing for Persons with Disabilities CFDA Number: 14.181 Type of Finding: • Material Weakness in Internal Control over Compliance • Compliance – Material Criteria or Specific Requirement: Deposits to the Replacement Reserve should be made on a monthly basis. Condition: Monthly deposits of $5,000 per month for 2022 and $6,000 per month for 2023 should be made into the Replacement Reserve account. The deposits were only made for 7 months in 2022 and 1 month for 2023. Questioned Costs. $91,000 Context: Procedures were performed to test the activity in the Replacement Reserve account for 2023, which determined that the proper deposits were not made through 2023. Cause: Controls were not followed to ensure that the proper amounts were being deposited into the Replacement Reserve account. Effect: The Replacement Reserve account is under funded by $91,000. Repeat Finding: Yes. Recommendation: The Project should deposit the $91,000 into the Replacement Reserve account as soon as possible. Views of Responsible Officials and Corrective Action: In March 2024, management deposited $69,000 into the Replacement Reserve. Management intends to deposit the $22,000 withing the next week. A monthly process has been established to insure that the monthly required deposits to the Replacement Reserve are made on a current basis.

Corrective Action Plan

Response for Correction of 2023-001: In March 2024, management deposited $69,000 into the Replacement Reserve. Management intends to deposit the $22,000 withing the next week. A monthly process has been established to insure that the monthly required deposits to the Replacement Reserve are made on a current basis.

Categories

Questioned Costs HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 499867 2023-002
    Material Weakness Repeat
  • 1076308 2023-001
    Material Weakness Repeat
  • 1076309 2023-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $2.32M