Finding 512715 (2024-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2024

Accepted

2024-12-03

Audit: 330580

Organization: Ide Center Apartments Ii, Inc. 042-Hd045 (OH)

Auditor: Cliftonlarsonallen LLP

AI Summary

Core Issue: The project withdrew funds from the Replacement Reserve Account without prior HUD approval.
Impacted Requirements: Compliance with HUD guidelines for fund withdrawals was not met due to insufficient staff training.
Recommended Follow-Up: Establish a formal process for fund withdrawals and ensure staff are trained on HUD requirements.

Finding Text

Federal Agency Dept of Housing and Urban Development Federal Program Name Supportive Housing for Persons with Disabilities Assistance Listing Number 14.181 Type of Finding: Significant Deficiency in Internal Control Criteria: The project is required to obtain HUD approval prior to withdrawing funds from the Replacement Reserve Account. Cause Staff involved in internal controls over this compliance requirement lacked sufficient training. Effect The Project is out of compliance with HUD requirements. Questioned costs: 0.00 Context: The Project withdrew funds without obtaining a signed 9250 from HUD Repeat Finding: No Recommendation: Document and follow a formal process that follows HUDs guidelines for withdrawal of Replacement Reserve Funds. Views of Responsible Officials: Agree that a formal process and education of HUD requirements regarding Replacement Reserve withdrawals would help the project be successful in maintaining compliance. Corrective action plan - management response: Contact HUD regarding the submission of the 9250, receive a signed copy prior to withdrawing any more funds.

Corrective Action Plan

Supportive Housing for Persons with Disabilities – Assistance Listing No. 14.181 Unauthorized Withdrawal from Replacement Reserve Account Recommendation: Conduct training with all those who are involved with the Project to review HUD requirements for making withdrawals from the Replacement Reserve and create a documentation process for requests and approvals. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: o conduct training to review all HUD requirements regarding the process for withdrawing funds from the Replacement Reserve Account. Name(s) of the contact person(s) responsible for corrective action: Stacy Lawson, Chief Financial Officer, Jacob Schimming, Project Accountant. Planned completion date for corrective action plan: October 31, 2024

Other Findings in this Audit

512716 2024-001

Significant Deficiency
1089157 2024-001

Significant Deficiency
1089158 2024-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.181	Supportive Housing for Persons with Disabilities	$1.21M
14.239	Home Investment Partnerships Program	$119,600