Finding Text
FINDING No. 2023-004: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155
Finding Resolution Status: Resolved.
Information on Universe Population Size:
Payroll disbursements.
Sample Size Information: Property manager payroll disbursements.
Identification of Repeat Finding and Finding Reference Number:
No.
Criteria: Per HUD compliance requirements, all disbursements from the regular operating account must be supported by approved invoices, bills, or other supporting documentation and should only be used to pay for activities of the Project. Project funds cannot be loaned or used on nonproject purposes without HUD approval.
Statement of Condition: The Project paid the full biweekly wage amount of the property manager, who is also employed at a second sister property, for approximately three months. That property is responsible for the other half of the property manager’s wages totaling $6,840.
Cause: The Project did not adjust the wage amount prior to submitting payroll for payment.
Effect or Potential Effect: Unauthorized use of project assets.
Auditor Non-Compliance Code: H – Unauthorized distribution of project assets
Reporting Views of Responsible Officials:
The Project agrees with the finding and the auditor’s recommendations have been adopted.
Recommendation: The Project should improve monitoring of the payroll disbursement process to ensure the appropriate approved wages are paid.
Response Indicator: Agree.
Completion Date: 06/30/2023
Response: Additional payroll controls are being evaluated and implemented in 2024. This will include establishing procedures to ensure the completeness and accuracy of payroll and related oversight.
Questioned Costs – Department of Housing and Urban Development $6,840
Total Questioned Costs – Department of Housing and Urban Development $215,405