Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements PRAC project funds must be used only for expenses that are reasonable and necessary to the operation of the project. The Regulatory Agreement states the borrower shall not incur any liability or obligation not in connection with the project.
Condition: During our audit, we noted that Brook View Gardens made payments on behalf of other projects.
Questioned costs: None
Context: During the audit we determined that there is a shared insurance policy for 4 projects sponsored by Preferred Properties that Brook View Gardens paid premiums for and was not reimbursed for these payments. In addition, see finding 2024-004 for detail regarding a separate vouchering issue.
Cause: The amounts were vouchered and not reimbursed due to oversight.
Effect: Project is out of compliance with regulatory agreement and Allowable Cost Provisions.
Repeat Finding: No
Recommendation: Performing training regarding HUD requirements surrounding Allowable Cost Provision and to collect reimbursement for unallowable costs immediately.
Views of responsible officials: There is no disagreement with the audit finding.