Finding 562211 (2024-003)

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2024-003: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION The Project improperly paid for one expense in the amount of $72 on behalf of another project during the year ended December 31, 2024. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to use funds in accordance with the Regulatory Agreement. EFFECT OF CONDITION The Project used funds to pay for an expense related to another project, which is in the same location as the Project. CONTEXT During the audit process, a sample size of 40 cash disbursements were tested to determine if the funds were properly disbursed in accordance with the Regulatory Agreement. One out of the 40 cash disbursements was not properly disbursed. CAUSE OF CONDITION Management mistakenly did not ensure the correct project was paying the appropriate share of a vendor’s invoice resulting in a payment on behalf of another project of $72. RECOMMENDATION The auditor recommends ensuring all disbursements are thoroughly reviewed prior to authorizing the expense to be paid. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be reimbursed by the other project for the expense paid on its behalf.