Finding 561897 (2024-004)

Criteria Replacement reserve disbursements should be made for only HUD approved purposes according to HUD guidelines. Condition During our audit procedures we noted that a disbursement was made for the same expense twice. Cause of Condition The control in place over replacement reserve disbursements did not detect the error due to two separate employees requesting disbursement on same invoice independently. Effect Due to the weakness in internal controls and compliance finding noted above, there is a risk of federal funds being expended on activities that are not allowed. Questioned Costs: $4,230 Identification as a Repeat Finding, if applicable – No Recommendation We recommend that management review their current policies and procedures and establish adequate internal controls related to replacement reserve disbursements. In addition, we recommend the Project return the funds to the replacement reserve account. Management’s Response Please see Project’s Corrective Action Plan included in this reporting package.