Finding Text
Finding #2022-002: Section 223(a)(7) HUD Insured Loan CFDA 14.135 (AAMHA KPTP, LLC HUD Project No. 115-35652). Type of Finding: Significant Deficiency. The Company had surplus cash available for distribution of $28,824 at December 31, 2021. The Company made distributions of $45,294. At June 30, 2022, the Company had no available surplus cash and made distributions of $45,294. The Company made distributions in excess of surplus cash totaling $61,764. See Section II for more information. Finding #2022-002: Section 223(a)(7) HUD Insured Loan CFDA 14.135 (AAMHA KPTP, LLC HUD Project No. 115-35652) Type of Finding: Significant Deficiency Condition: The Company had surplus cash available for distribution of $28,824 at December 31, 2021. The Company made distributions of $45,294. At June 30, 2022, the Company had no available surplus cash and made distributions of $45,294. The Company made distributions in excess of surplus cash totaling $61,764. Criteria: The HUD regulatory agreement requires Management to calculate surplus cash at mid-year and year-end to determine the amount of surplus cash available per the regulatory agreement. Questioned amount: $61,764 Effect: The Company is in violation of the terms of the HUD Regulatory Agreement governing surplus cash distributions. Cause: Timing of surplus cash calculation and owner distributions. Repeat Finding: Yes Recommendation: 2022-002a: We recommend management review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement. 2022-002b: At December 31, 2022, there was no available surplus cash. We recommend Alamo repay $61,764 to the Project?s operating account. Management?s View: Management is in agreement with the finding. Management has re-evaluated the current property management company due to the repeat finding and has plans to hire a new management company effective July 1, 2023. Auditor?s Comment: On March 28, 2023, Alamo repaid $61,764 to the Project. Finding 2022-002 Cleared.