Finding Text
Federal Agency: U.S. Department of Housing and Urban Development (HUD)
Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811)
Assistance Listing Number: 14.181
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or Specific Requirement: Deposits required by HUD were not made during fiscal year 2023
to the reserve fund.
Condition: During the 2023 audit, we noted that the Project had not deposited the amounts required by
HUD to be deposited monthly in the reserve fund for all of fiscal year 2023.
Questioned Costs: $8,580 in reserve fund deposits not made.
Context: Through audit compliance testing procedures, three months of bank reconciliations were
tested and identified that the required monthly deposit was not made. Through further inquiry and
review it was identified that all 12 deposits of fiscal year 2023 were not made and recorded as a liability.
Cause: Due to cash constraints caused by rental income delays the Project was unable to make the
deposits.
Effect: The Project did not make sufficient deposits.
Repeat Finding: None
Recommendation: We recommend the Project make all fiscal year 2023 deposits as soon as funds
allow.
Views of Responsible Officials: There is no disagreement with the audit finding. Management has
received the delayed rental income payments and is working to make the back deposits.