Finding Text
Schedule reference number 2023-002. Title and AL Number of Federal Program: Supportive Housing for the Elderly, AL 14.157 Type of finding: Compliance Resolution status: In Progress Population size: N/A Sample size: N/A Repeat finding: No Criteria: The Project did not have the proper insurance coverage as required by the capital advance agreement. Condition: The fidelity bond insurance coverage for the property was not in effect the entire year and excluded the apartment manager, board chair, board vice-chair, eight board members, board treasurer and CFO. Cause: The Project obtained fidelity bond insurance coverage effective February 27, 2023, however, the policy explicitly excluded certain officials and employees required by the capital advance agreement. Effect: The Property did not have adequate fidelity bond insurance coverage required by their regulatory agreement and had a lapse in other required insurance coverage. Noncompliance code: Z. Other Questioned cost: None Reporting views of officials: Management agrees with the finding. Context: This was noted during the audit. Recommendation: The proper coverage for fidelity bond insurance as required by the capital advance agreement should be put in place for the Project immediately. Auditors' summary of auditee's comments: The new management company understands the requirements and are in the process of obtaining all required coverage. Completion date: 12/31/24 Response: Management is in the process of obtaining all required insurance coverage. Corrective Action: In progress