Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT Department of Housing and Urban Development Finding, 2022-003: Major Program: Section 202 Supportive Housing for the Elderly, Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION The Project submitted the same invoice of $1,607 twice for a withdrawal from the reserve for replacement account during the year. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to only withdraw funds from the reserve for replacement account that are appropriately approved by HUD through a formal request. EFFECT OF CONDITION One invoice was inadvertently included in two separate reserve for replacement withdrawal requests that were reviewed and approved by HUD during the year resulting in a duplicate withdrawal of $1,607. CONTEXT During audit fieldwork, two reserves for replacement withdrawals were examined for compliance with HUD approval. One invoice was incorrectly included in both withdrawals for the year, making it a duplicate withdrawal. CAUSE OF CONDITION Management mistakenly included the invoice in two separate reserve for replacement withdrawal requests that were approved by HUD during the year resulting in a duplicate withdrawal of $1,607. RECOMMENDATION The auditor recommends the Project repay the $1,607 into the reserve for replacement account in 2023. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will monitor reserve for replacement withdrawals and will repay the $1,607 into the reserve for replacement account in 2023.