Finding 948369 (2023-001)

2023-001 – Timely Payment of Mortgage Balance Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions) Federal program U.S. Department of Housing and Urban Development ·   Supportive Housing for the Elderly (ALN# 14.157) Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for making timely payments to its mortgage payable, which is insured by HUD. Condition. Out of 12 monthly payments on the Project's HUD insured mortgage payable, that are due each fiscal year, 1 payment was late, resulting in a late fee. Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements. Effect. As a result of this condition, the mortgage was not paid on time. While there was ultimately payment of the delinquent monthly balance, the lack of effective internal controls could lead to future significant noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management should strengthen their current policies and follow a documented process for ensuring that monthly mortgage payments are made timely. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.