Finding Text
U.S. Department of Housing and Urban Development Finding 2022.003, CFDA #14.155 Section 223(f) ? Insured Mortgage Condition: The Project has receivables, totaling $9,689, from related parties at December 31, 2022. Criteria: The Project may only distribute funds to affiliates up to the amount required for management fees, or as reimbursement for payroll, benefits, and operating expenses. Amounts in excess are unauthorized distributions. Cause: During 2022, a transfer was inadvertently made from the wrong bank account. Effect: The Project is in violation of its regulatory agreement. Recommendation: The Project should request the affiliate repay the amounts due and monitor funds to assure payments to affiliates are only for management fees, or as reimbursement for payroll, benefits, and operating expenses. View of Responsible Officials: Subsequent to yearend, the Project requested and was repaid from the affiliate. The Project will continue to monitor related party activity to ensure the Project does not pay reimbursements or advances to affiliates in excess of allowed expenditures.