Finding Text
Findings reference number: 2024-001 - Title and AL Number of Federal Program: Supportive Housing for the Elderly - Section 202 Capital Advance (AL 14.157) - Type of finding: Federal Award (Compliance) - Resolution Status: In process - Population size: N/A - Sample size: N/A - Repeat finding: Yes - Criteria: Funds should not be withdrawn from the reserve for replacement without HUD's written authorization. - Condition: Review of the reserve for replacement account showed that $6,000 and $12,799 had been withdrawn in 2022 and 2023, respectively, without HUD's approval. The $12,799 from 2023 was paid back in 2024, but the $6,000 was not paid back until February 2025. Additionally, the Project withdrew $34,598 in 2024 without HUD's approval, of which $25,283 was paid back in 2024 and $9,315 in 2025. - Cause: The Project had a shortfall of operational cash and used some funds from the reserve for replacement account to pay for operating expenses. Effect: The Project had to redeposit such funds to the reserve for replacement or obtain authorization for the withdrawal. - Noncompliance code: A. Unauthorized withdrawal - Questioned costs: N/A. - Reporting views of officials: Auditee agrees with the finding. - Contract Number: 114-EE150 - Context: The funds were withdrawn because of a shortfall of operating cash. - Recommendation: Management should not withdraw funds from the reserve for replacement without HUD authorization. - Auditee's comments: Auditee agrees with the finding and has replenished the money to the reserve for replacement account in February 2025. - Auditors' summary of auditee's comments: They are in agreement. - Completion date: 12/31/2025 - Response: Management transferred all the shortfalls during February 2025.