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: Unauthorized disbursements from the reserve fund were made.
Condition: During the 2023 audit, we noted that the Project had made unauthorized withdrawals from the reserve fund.
Questioned Costs: $6,011 in unauthorized withdrawals were made.
Context: Through audit compliance testing procedures, it was identified there were no withdrawals made during fiscal year 2023 authorized by HUD, however, through additional procedures over the reserve, there were three withdrawals identified.
Cause: Due to cash constraints caused by rental income delays the Project was required to make withdrawals to continue operations.
Effect: The Project did not make authorized withdrawals.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-002.
Recommendation: We recommend the Project return the withdrawn funds back to the reserve funds when the funds allow.
Views of Responsible Officials: There is no disagreement with the audit finding. Management has received the delayed rental income payments and is working to return the funds.