Finding 503902 (2024-003)

Material Weakness
Requirement
A
Questioned Costs
$1
Year
2024
Accepted
2024-10-28

AI Summary

  • Unauthorized Loan: $12,812 was transferred to an affiliate from project cash without HUD approval.
  • Compliance Issue: Lack of procedures allowed unauthorized disbursements, leading to questioned costs.
  • Action Required: Management must implement procedures to prevent future unauthorized payments.

Finding Text

Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Condition During the year ended July 30, 2024, the Project transferred funds in the amount of $12,812 to an affiliate from project cash without HUD approval. The funds have since been transferred back. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Effect or Potential Effect The payments of $12,812 were unauthorized loans and therefore considered to be questioned costs. Questioned Costs $12,812 Identification as a Repeat Finding This is not a repeat finding. Recommendations Management should establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G. Unauthorized loans from project assets. View of Responsible Officials Management agrees with the finding and recommendation and has reviewed the HUD requirement for funding. Funds have been transferred and will maintain HUD policy of no unauthorized loans between affiliates. Finding Resolutions Status: Resolved

Corrective Action Plan

Management agrees with the finding and recommendation and has reviewed the HUD requirement for funding. Funds have been transferred and will maintain HUD policy of no unauthorized loans between affiliates.

Categories

Questioned Costs HUD Housing Programs Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 503898 2024-001
    Material Weakness Repeat
  • 503899 2024-001
    Material Weakness Repeat
  • 503900 2024-002
    Material Weakness
  • 503901 2024-002
    Material Weakness
  • 503903 2024-003
    Material Weakness
  • 503904 2024-004
    Material Weakness
  • 503905 2024-004
    Material Weakness
  • 503906 2024-005
    Material Weakness
  • 503907 2024-005
    Material Weakness
  • 1080340 2024-001
    Material Weakness Repeat
  • 1080341 2024-001
    Material Weakness Repeat
  • 1080342 2024-002
    Material Weakness
  • 1080343 2024-002
    Material Weakness
  • 1080344 2024-003
    Material Weakness
  • 1080345 2024-003
    Material Weakness
  • 1080346 2024-004
    Material Weakness
  • 1080347 2024-004
    Material Weakness
  • 1080348 2024-005
    Material Weakness
  • 1080349 2024-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $4.99M
14.157 Supportive Housing for the Elderly ("prac") $451,896