Finding 969780 (2023-001)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Operating Assistance for Troubled Multifamily Housing Projects Assistance Listing Number: 14.164 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: HUD requires that the Organization maintain a Fidelity Bond that is equal to or exceeds two months of gross potential receipts. Condition: Two months of gross potential receipts was in excess of the Fidelity Bond maintained by the Organization. Questioned costs: None Context: The Organization did not maintain a fidelity bond in excess of two months of gross potential collections. The required coverage was $616,781 or more, but the actual coverage was $500,000. Cause: The Organization did not increase their insurance coverage for increases in revenue and other receipts. Effect: The Organization does not have the required coverage determined by HUD and exposes themselves to potential liability. Repeat Finding: No Recommendation: We recommend that the Organization increase their Fidelity Bond insurance coverage. Views of responsible officials: There is no disagreement with the audit finding. Effective February 5, 2024, the Organization had increased their Fidelity Bond coverage for the 2024 fiscal year.