Finding Text
Section III - Federal Award Findings and Questioned Costs Finding 2022-001: Distributions in excess of surplus cash available Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: Illinois Housing Development Authority Program Name: Section 8 Project - Based Cluster Assistance Listing Number: 14.195 Award Numbers: IL062156201 Category of Finding: Unauthorized distribution of project assets Criteria: The Regulatory Agreement for Multifamily Projects requires the computation of surplus cash prior to the distribution of funds to members and repayment of related-party debt. Any surplus cash in the project funds account should be deposited in a federal insured account and withdrawals may be made only for project purposes and with the approval of HUD. Condition/Context: There were distributions in excess of surplus cash available to be distributed during the year ended June 30, 2022, in the amount of $11,142. The population consists of distribution in the amount of $29,374. Cause: The Company made the distributions without considering surplus cash calculation. Effect: This may result in funds being distributed in excess of allowed amounts. Questioned Costs: None Repeat Finding: No Recommendation: We recommend management to complete and review the calculation of surplus cash to ensure it is accurate and ensure surplus cash is available prior to distributions. Management?s response: Management agrees with the aforementioned finding.