FAC Explorer

Finding 571894 (2024-003)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2024
Accepted
2025-07-24
Audit: 362935
Organization: Leeway-Welton Housing Corporation (CT)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: The reserve for replacement funds was improperly combined with the operating account, violating compliance requirements.
  • Impacted Requirements: Funds must be maintained in a separate bank account to ensure proper oversight and prevent unauthorized spending.
  • Recommended Follow-Up: Open a separate bank account for the reserve for replacement funds, as agreed upon by management, to enhance internal controls.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Reserve for replacement funds were not maintained in a separate bank account. Condition: During the 2024 audit, we noted that the reserve for replacement bank account was closed and deposited into the operating bank account. Questioned Costs: None. Context: Bank reconciliations tested identified no separate bank account for the reserve for replacement account. Cause: Due to change in management company during 2024. Effect: The Project did not properly segregate the reserve for replacement funds increasing the potential for funds to be spent without approval from HUD. Repeat Finding: None. Recommendation: We recommend withdrawing the reserve for replacement funds and opening a separate bank account. Views of Responsible Officials: We agree with the above recommendation. During 2025, the funds were withdrawn from the operating account and deposited into a separate bank account.

Corrective Action Plan

Reserve for replacement funds were not maintained in a separate bank account. Recommendation: CLA Recommends withdrawing the reserve for replacement funds and opening a separate bank account. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned in response to finding: During 2025, the funds were withdrawn from the operating account and deposited into a separate bank account. Name of the contact person responsible for corrective action: Sabine Cox, EHM Comptroller Planned completion date for corrective action plan: March 4, 2025

Categories

HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 571892 2024-001
    Significant Deficiency Repeat
  • 571893 2024-002
    Significant Deficiency
  • 571895 2024-004
    Significant Deficiency Repeat
  • 571896 2024-001
    Significant Deficiency Repeat
  • 571897 2024-002
    Significant Deficiency
  • 571898 2024-003
    Significant Deficiency
  • 571899 2024-004
    Significant Deficiency Repeat
  • 1148334 2024-001
    Significant Deficiency Repeat
  • 1148335 2024-002
    Significant Deficiency
  • 1148336 2024-003
    Significant Deficiency
  • 1148337 2024-004
    Significant Deficiency Repeat
  • 1148338 2024-001
    Significant Deficiency Repeat
  • 1148339 2024-002
    Significant Deficiency
  • 1148340 2024-003
    Significant Deficiency
  • 1148341 2024-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $226,775