Finding Text
Finding Type - Noncompliance which could have a direct and material effect on the major programs. Title and CFDA Number of Federal Program - 14.155 - U.S. Department of Housing and Urban Development - Mortgage Insurance for Refinancing of Existing Multifamily Rental Housing (Section 223(f)). Finding Resolution Status - Resolved Information on Universe and Population Size - The population was the reduction in payables from the prior year. Sample Size Information - Not subject to sampling Identification of Repeat Finding and Finding Reference Number - Not a repeat finding. Criteria - The regulatory agreement with HUD requires that the Corporation's cash should only be used to for pay for the Corporation's expenses. Statement of Condition - The Corporation repaid approximately $188,000 of owner advances without HUD's approval resulting in an unauthorized use of operating cash. Cause - The Corporation did not request approval from HUD prior to repaying the owner advances. Effect or Potential Effect - The Corporation paid amounts owed to related parties in excess of what was permitted by HUD. Auditor Noncompliance Code - H - Unauthorized distribution of project assets. Reporting Views of Responsible Officials - The related parties repaid the $188,000 to the Corporation in March 2023. Context - The Corporation did not request approval from HUD prior to repaying the owner advances. Recommendation - The related parties should repay the $188,000 to the Corporation or request HUD's approval to allow the payment of the owner advances. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Client took the appropriate actions to repay the Corporation $188,000 in 2023. Response Indicator - Agree Completion Date - March 27, 2023 Response - Management acknowledges noncompliance in the current fiscal year and has corrected the repayment of the owner advances by returning $188,000 to the Corporation.