FAC Explorer

Finding 502679 (2023-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-10-15
Audit: 324703
Organization: Louis Sandman Senior Housing, Inc. (OK)
Auditor: John Flusche CPA

AI Summary

  • Core Issue: Unauthorized withdrawal of $15,154 from the Replacement Reserve Account without HUD approval.
  • Impacted Requirements: Funds cannot be withdrawn without prior authorization via HUD-9250 form.
  • Recommended Follow-Up: Management must redeposit the withdrawn funds and ensure future withdrawals have proper authorization.

Finding Text

Title and CFDA Number of Federal Program: Section 202 Capital Advance CFDA # 14.181 Type of Finding: Federal Award Finding Finding Resolution Status: Unresolved Criteria: The Project is not permitted to withdraw funds from the Replacement Reserve Account without the prior authorization from their HUD representative. Statement of Condition: The Project’s manager withdrew funds that were not approved by HUD using the HUD-9250 Funds Authorization from the Replacement Reserve worksheet. Cause: The Project’s management did not have the funds available to pay the insurance for the property. Management did not submit Form 9250 requesting authorization to withdraw the funds. Effect or Potential Effect: The Project’s Replacement Reserve Account is underfunded by $15,154 from 2023 unauthorized withdraws. Reporting Views of Responsible Officials: The Project’s management should redeposit the funds into the Replacement Reserve account as soon as possible, to bring the account to the correct balance. Recommendation: The Project’s management should redeposit the funds into the Replacement Reserve account as soon as possible, to bring the account to the correct balance. Auditor’s Summary of the Auditee’s Comments on the Finding Recommendations: The Project’s management withdrew funds without receiving authorization to withdraw funds from the Replacement Reserve account. Funds should only be withdrawn from the Replacement Reserve account after the HUD-9250 “Funds Authorization” form is signed by the HUD Representative. Response Indicator: Agree Completion Date: 03/12/2024 Response: The Project’s management will fully redeposit the funds into the Replacement Reserve account in 2024 and will not withdraw funds in the future without proper authorization.

Corrective Action Plan

CORRECTIVE ACTION PLAN ISSUED BY THE BOARD OF DIRECTORS Louis Sandman Senior Housing, Inc. respectfully submits the following corrective action plan for the year ended December 31, 2023. Name and address of public accounting firm: John Flusche, CPA 5735 East 102nd Street Tulsa, Oklahoma 74137 Audit Period: Year ended December 31, 2023 The findings from the December 2023, schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDING No. 2023-001: Recommendation: The Project’s management should redeposit the funds into the Replacement Reserve bank account as soon as possible, to bring the account to the correct balance. Action Taken: The Project’s management will redeposit the funds into the replacement reserve account in 2024. If the Department of HUD has questions regarding this plan, please contact Rick Gowin, Westchester Realty & Development. March 12, 2024 Allen Leaird, Board Member Date March 12, 2024 Rick Gowin, Management Agent Date

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

  • 1079121 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.20M
14.195 Section 8 Housing Assistance Payments Program $31,770