Finding 519309 (2024-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-01-15
Audit: 338151
Organization: Ahepa 310-Xii, Inc. (AL)

AI Summary

  • Core Issue: The Organization withdrew $12,711 from the replacement reserve without HUD approval, which was not caught by internal controls.
  • Impacted Requirements: The Regulatory Agreement mandates that all withdrawals from the replacement reserve must have prior HUD approval.
  • Recommended Follow-Up: Management should enhance internal controls and ensure HUD approval is obtained before any future withdrawals from the replacement reserve.

Finding Text

S3800-010 Finding reference number 2024-001 S3800-011 Title and AL number of federal program Supportive Housing for the Elderly #14.157 S3800-015 Type of finding Federal Award Finding S3800-016 Finding resolution status Resolved S3800-017 Information on universe population not applicable S3800-018 Sample information not applicable S3800-019 Identification of repeat finding and finding reference number not applicable S3800-020 Criteria The Regulatory Agreement between HUD and the owner stipulates that HUD approval is required for replacement reserve withdrawals. S3800-030 Statement of condition The Organization made a withdrawal of $12,711 that was not approved by HUD from the replacement reserve account that was not timely detected and corrected by the Organization's internal control. S3800-032 Cause Management did not request HUD approval and duplicated a past HUD approved withdrawal. S3800-033 Effect or potential effect Cash may be unavailable to meet reasonable and necessary capital obligations of the project. S3800-035 Auditor non-compliance code A - Unauthorized withdrawals from replacement S3800-040 Questioned costs $0 S3800-037 Property associated with the finding 062EE089 S3800-038 Questioned costs $0 S3800-045 Reporting views of responsible Management agrees. S3800-050 Context There are no questioned costs. The finding does not relate to an undocumented transaction or unreasonable expenditure. S3800-080 Recommendation Management should monitor internal controls over compliance and receive HUD approval before distributions from the replacement reserve account are authorized. S3800-090 Auditors' Summary of the Auditee's Comments on the Findings and Management concurs S3800-130 Response indicator Agree S3800-140 Anticipated Completion Date September 30, 2024 S3800-150 Response Management has transferred the funds into the replacement reserve account.

Corrective Action Plan

Management agrees with the finding and has made the transfer into the replacement reserve account.

Categories

Reporting HUD Housing Programs

Other Findings in this Audit

  • 1095751 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly - Section 202 Hud Capital Advance $5.32M
14.157 Supportive Housing for the Elderly - Project Rental Assistance Contract $169,890