Finding 503000 (2024-001)

Finding Type: -Immaterial noncompliance with major program requirements -Significant deficiency in internal control over compliance Title and Assistance Listing Number of Federal Program - Supportive Housing for Persons with Disabilities (Section 811 Capital Advance and PRAC Subsidy) Finding Resolution Status - Resolved Information on Universe and Population Size - Withdraws made from the replacement reserve during the year ended June 30, 2024 Sample Size Information - N/A Identification of Repeat Finding and Finding Reference Number - N/A Criteria - The Corporation should have HUD authorization for all withdrawals from the replacement reserve account, as required by the Compliance Supplement. Statement of Condition - Withdrawals totaling $22,095 were made from the replacement reserve prior to HUD authorization. Cause - The Corporation withdrew $22,095 from the replacement reserve account without obtaining prior approval from HUD. Effect or Potential Effect - The unauthorized withdrawals could cause the replacement reserve account to be underfunded at year end. Auditor Noncompliance Code - A - Unauthorized withdrawals from replacement reserve account Reporting Views of Responsible Officials - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Context - The Corporation withdrew a total of $44,190 from the replacement reserve account when only $22,095, representing the 50 percent deposit, was approved by HUD in advance of the withdrawal. The remaining $22,095 was withdrawn without obtaining approval from HUD in advance of the second withdrawal. Recommendation - The Corporation should only withdraw amounts from the replacement reserve that are preapproved by HUD. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management should obtain approval from HUD prior to withdrawing funds from the replacement reserve. Response Indicator - None Completion Date - August 8, 2024 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance.