Finding Text
Department of Housing and Urban Development Finding 2022-001 Section 202 Supportive Housing for the Elderly, AL 14.157 Statement of Condition During the year ended September 30, 2022, the Project paid expenses in the amount of $6,500 on behalf of an affiliate from project cash without HUD approval. The amount due to the Project as of September 30, 2022 is $6,500. Criteria Loans are not permitted to be made from project cash without prior authorization from HUD. Effect The payments of $6,500 were unauthorized loans and therefore considered to be questioned costs. Cause Procedures were not in place to ensure that cash disbursements of project funds were limited to project operating costs. Recommendation Management should immediately reimburse the amount due to the Project and establish procedures to ensure payments of this nature are not made in the future. Auditor Noncompliance Code: G. Unauthorized Loans (REAC); N. Special Tests and Provisions (UG) Finding Resolution Status: In process. As of January 10, 2023, the check request for the reimbursement to Evangeline Booth Friendship House has been approved. Reimbursement is anticipated in the near future. Reporting Views of Responsible Officials Management agrees with the finding and is taking steps to address the issue that caused it. The $6,500 will be repaid to the property.