Finding Text
CONTROL DEFICIENCIES- NON-MATERIAL WEAKNESSES SIGNIFICANT DEFICIENCIES 2022-001 Authorized replacement reserve. Condition: Burbank Orchards, Inc. did not submit the Funds Authorization form HUD-9250 and all the required information and receive signed approval, prior to releasing amounts from the replacement reserve bank account. Criteria: Burbank Orchards, Inc. is required to submit the Funds Authorization form HUD-9250 and all the required information and receive signed approval, prior to releasing amounts from the replacement reserve bank account. Cause: Burbank Orchards? property management did not follow the required actions to properly complete and submit the Funds Authorization HUD form-9250 and receive signed approval as required. Effect: Because of the of the releasing of amounts from the replacement reserve prior to receiving signed approval on the Funds Authorization form HUD-9250, the U.S. Department of Housing and Urban Development may take action corrective action against Burbank Orchard, Inc. Recommendations: Burbank Orchards, Inc. must take steps to ensure that they submit the Funds Authorization form HUD-9250 and all the required information and receive signed approval, prior to releasing amounts from the replacement reserve bank account. Views of the responsible officials and planned corrective actions: We concur with the above finding and this finding has been reviewed and studied for the purpose of ensuring this does not take place in the future. Additional controls/procedures will be in place to ensure this does not happen in the future are as follows: ? All requests will be prepared by the Community manager and submitted to accounting for copies of invoices, checks, etc. ? Once all supporting documents are obtained, the HUD form 9250 will be prepared, and reviewed by Assistant Director and submitted to HUD for approval along with all documentation. ? A tracking sheet will be used to track the submission and the approval, with appropriate follow up. ? Once approval from HUD is received the entire packet will be submitted for review by ownership/Board, along with the HUD approval. The board will provide written approval of the transfer. ? Only after the Board has reviewed and provided written approval, will funds be transferred from the Replacement Reserve account over to the operating account.