FAC Explorer

Finding 64086 (2022-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2022-12-04
Audit: 70020
Organization: Cocaa Seminole Development, Inc. (OK)
Auditor: John Flusche CPA

AI Summary

  • Core Issue: Unauthorized withdrawal of $3,000 from the Replacement Reserve Account without HUD approval.
  • Impacted Requirements: Funds can only be withdrawn with prior authorization using the HUD-9250 form.
  • Recommended Follow-Up: Management must redeposit the withdrawn funds and ensure future withdrawals have proper authorization.

Finding Text

FINDING Ref Number: 2022-001 Title and CFDA Number of Federal Program: Section 202 Capital Advance CFDA # 14.181 Type of Finding: Federal Award Finding Finding Resolution Status: Unresolved Criteria: The Project is not permitted to withdraw funds from the Replacement Reserve Account without the prior authorization from their HUD representative. Statement of Condition: The Project?s manager withdrew funds that were not approved by HUD using the HUD-9250 Funds Authorization from the Replacement Reserve worksheet. Cause: The Project?s management did not have the funds available to pay contractors for work performed on the property. Management did not submit Form 9250 requesting authorization to withdraw the funds. Effect or Potential Effect: The Project?s Replacement Reserve Account is underfunded by $3,000 from 2022 unauthorized withdraws. Reporting Views of Responsible Officials: The Project?s management should redeposit the funds into the Replacement Reserve account as soon as possible, to bring the account to the correct balance. Recommendation: The Project?s management should redeposit the funds into the Replacement Reserve account as soon as possible, to bring the account to the correct balance. Auditor?s Summary of the Auditee?s Comments on the Finding Recommendations: The Project?s management withdrew funds without receiving authorization to withdraw funds from the Replacement Reserve account. Funds should only be withdrawn from the Replacement Reserve account after the HUD-9250 ?Funds Authorization? form is signed by the HUD Representative. Response Indicator: Agree Completion Date: 06/23/2022 Response: The Project?s management will fully redeposit the funds into the Replacement Reserve account in 2022 and will not withdraw funds in the future without proper authorization.

Corrective Action Plan

CORRECTIVE ACTION PLAN ISSUED BY THE BOARD OF DIRECTORS COCAA Seminole Development, Inc. respectfully submits the following corrective action plan for the year ended March 31, 2022. Name and address of public accounting firm: John Flusche, CPA 5735 East 102nd Street Tulsa, Oklahoma 74137 Audit Period: Year ended March 31, 2022 The findings from the March 2022, schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDING No. 2022-001: Recommendation: The Project?s management should redeposit the funds into the Replacement Reserve account as soon as possible, to bring the account to the correct balance. Action Taken: The Project?s management has partially redeposited the funds into the Replacement Reserve account in 2022 and will not withdraw funds in the future without proper authorization. If the Department of HUD has questions regarding this plan, please contact Rick Gowin, Westchester Realty & Development. June 23, 2022 Fred Combs, President Date June 23, 2022 Rick Gowin, Management Agent Date

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

  • 640528 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.27M
14.195 Section 8 Housing Assistance Payments Program $31,299