Finding 971087 (2023-002)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: CFDA 14.157 Supportive Housing for the Elderly Assistance Listing Number: 14.157 Federal Award Identification Number and Year: 075-EE017-WAH - 2023 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards requires compliance with the provisions of the regulatory agreement. The Corporation should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted that the Corporation did not have adequate internal controls designed to ensure that required monthly deposits to the replacement reserve fund were made in a timely manner. Questioned costs: None noted. Context: Noncompliance was identified as a result of testing the required deposits to the replacement reserve fund. Cause: The Corporation did not deposit the November and December deposits until January 2024 Effect: The Corporation is not in compliance with program requirements. Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are made in a timely manner in accordance with the regulatory agreement. Views of responsible officials: Management agrees with the finding.