Finding 613701 (2022-003)

-
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-09-24

AI Summary

  • Core Issue: The Project borrowed $15,000 from HUD's replacement reserves and did not repay it as required.
  • Impacted Requirements: The failure to repay resulted in an underfunded replacement reserve balance, violating the agreement with HUD.
  • Recommended Follow-up: The Project should repay the loan promptly when funds are available and ensure compliance with HUD loan terms moving forward.

Finding Text

Over the Rainbow Association and Subsidiaries SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED DECEMBER 31, 2022 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT For the Rockford Supportive Housing Facility Questioned Costs FINDING 2022-003: SECTION 811, ASSISTANCE LISITNG NUMBER 14.181 Condition: The Project took a HUD subsidy loan from replacement reserves of $15,000 and failed to repay the loan based upon the terms of the agreement with HUD. Criteria: The Project should have repaid the required amount to replacement reserves. Effect: The replacement reserve balance was underfunded by $15,000 at December 31, 2022. Context: All elements of the replacement reserve account were tested at December 31, 2022. No sample was selected. Questioned Costs $15,000 Cause: The Project neglected to repay the HUD subsidy loan based upon the terms of the agreement. Recommendation: The Project should repay the HUD subsidy loan as soon as funds are available. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. A $15,000 transfer will be made once funds are available. Management will be reminded to carefully review HUD correspondence to make sure HUD subsidy loan terms are being followed. Total - Department of Housing and Urban Development $15,000 Non-compliance code - N

Categories

Questioned Costs HUD Housing Programs Matching / Level of Effort / Earmarking

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $15.51M
14.155 Section 223(f) Insured Mortgage $897,915
14.195 Section 8 Housing Assistance Payments Program $832,130
14.181 Supportive Housing for Persons with Disabilities Prac $492,499