Our audit objective was to determine whether Elders Place, Incorporated, (Elders Place, Inc.), administered project operating funds in accordance with U.S. Department of Housing and Urban Development (HUD) requirements.

Elders Place, Inc., did not administer project operating funds in accordance with HUD requirements. It made more than $309,900 in unsupported disbursements and more than $73,400 in ineligible disbursements and, thereby, did not sufficiently protect HUD's and the residents' interests in the project.

We recommend that HUD direct Elders Place, Inc., to provide documentation to support $309,929 in unsupported costs or reimburse the project for any unsupported costs from nonfederal funds. Additionally, we recommend that HUD direct Elders Place, Inc., to repay the project $73,447 from nonfederal funds for the ineligible costs identified by the audit.We also recommend that HUD direct Elders Place, Inc., to develop and implement controls to ensure that project operating funds are administered in compliance with applicable HUD and federal regulations, thereby preventing $13,155 from being disbursed improperly over the next year. We further recommend that HUD take administrative sanctions against Greater Germantown Housing Development Corporation, the project's sponsor for violations of the regulatory agreement.