FAC Explorer

Finding 565406 (2024-008)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-06-19
Audit: 359276
Organization: Kearsarge Elderly Housing, Inc. (NH)
Auditor: Leone McDonnell & Roberts P A

AI Summary

  • Core Issue: Management agent withdrew more than the HUD approved amount from the reserve for replacement account.
  • Impacted Requirements: All withdrawals must match HUD's approved amounts to ensure compliance.
  • Recommended Follow-Up: Return the excess funds to the reserve and implement procedures to prevent future over-withdrawals.

Finding Text

Information on universe: It was noted during testing that the management agent withdrew more than the HUD approved amount from the reserve for replacement account. Sample size: Monthly reserve activity is tested for compliance. Identification of repeat finding: No Condition: A withdrawal from the reserve for replacement was greater than the amount approved by HUD. Criteria: All reserve for replacement withdrawals should match the amount approved by HUD. Effect: Reserve funds were spent on items not approved by HUD. Context: Auditor reviewed the source documents noting the amount withdrew was greater than the approved amount. Cause: lack of oversight at the management agent. Recommendation: The excess withdrawal should be returned to the reserve account. Additionally, a procedure should be implemented to ensure that amounts withdrawn from the reserve for replacement account do not exceed the approved amount.

Corrective Action Plan

The Director of Affordable Housing did not notice that on the withdrawal approval letter the amount had been changed. The request was sent to the bank with the original amount on it, and the transfer was done at the higher amount. The money was returned to the RFR account on 5-20-2025. Completion Date: 5/20/2025 Contact: Jill Lesmerises, CFO

Categories

HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 565394 2024-002
    Significant Deficiency Repeat
  • 565395 2024-003
    -
  • 565396 2024-002
    Significant Deficiency Repeat
  • 565397 2024-003
    -
  • 565398 2024-004
    -
  • 565399 2024-004
    -
  • 565400 2024-005
    Significant Deficiency
  • 565401 2024-005
    Significant Deficiency
  • 565402 2024-006
    Significant Deficiency Repeat
  • 565403 2024-006
    Significant Deficiency Repeat
  • 565404 2024-007
    Material Weakness Repeat
  • 565405 2024-007
    Material Weakness Repeat
  • 565407 2024-008
    Significant Deficiency
  • 1141836 2024-002
    Significant Deficiency Repeat
  • 1141837 2024-003
    -
  • 1141838 2024-002
    Significant Deficiency Repeat
  • 1141839 2024-003
    -
  • 1141840 2024-004
    -
  • 1141841 2024-004
    -
  • 1141842 2024-005
    Significant Deficiency
  • 1141843 2024-005
    Significant Deficiency
  • 1141844 2024-006
    Significant Deficiency Repeat
  • 1141845 2024-006
    Significant Deficiency Repeat
  • 1141846 2024-007
    Material Weakness Repeat
  • 1141847 2024-007
    Material Weakness Repeat
  • 1141848 2024-008
    Significant Deficiency
  • 1141849 2024-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $1.86M