2022-002 Internal Controls Over Financial Reporting Finding Related to: Compliance ? CDFA No. 14.181 Criteria: : The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The Organization had limited access to tenants due to COVID pandemic and the quarantine recommendations in place. Effect: The Organization is not in compliance with HUD?s requirement. Recommendation: We recommend that documents are signed via mail or electronically if in person contact is not available. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
2022-003 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance ? CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Fulton Homes, Inc. was required to deposit $2,958 into the replacement reserve during the year ended June 30, 2022. The Organization has not deposited the required reserve amount as of June 30, 2022. Cause: The Organization deposited past due arrearages to the replacement reserve account during the year ended June 30, 2022 and did not realize until after year end that there was an additional $2,958 owed. Effect: South Fulton Homes, Inc. should have deposited $2,958 for the year ended June 30, 2022, in the replacement reserve. South Fulton Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $2,958 be made into the replacement reserve account in order for South Fulton Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Fulton Homes, Inc. concurs with the recommendation. South Fulton Homes, Inc. management had thought it made all the necessary past arrearages. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $2,958 deposit in October 2022.
2022-004 Project Rental Assistance Payment Adjustments Not Made Timely Finding Related to: Compliance ? CDFA No. 14.181 Criteria: Project rental assistance payments are made for qualified tenants that occupy the assisted unit. Cause: Project rental assistance payments were collected for a tenant that had vacated the assisted unit for five months during the year ended June 30, 2022. The adjustment was not identified until the audit was performed. In addition, approved changes to project rental assistance rates were not updated timely on HUD vouchers. Effect: Project rental assistance payments totaled approximately $38,500 for the year ended June 30, 2022. Of this amount approximately $2,200 was paid for a tenant that had vacated the assisted unit for five months during the year ended June 30, 2022. The adjustment was not identified and corrected until the audit was performed. No other instances of payments made for unadjusted vacancies were noted. Recommendation: Develop policies to identify changes in tenant vacancies and rent changes and make adjustments for these changes timely. Auditee Response: South Fulton Homes, Inc. concurs with the recommendation. The adjustments was made in the year ended June 30, 2023. Due to staffing shortages experienced since the COVID pandemic, another employee took over the responsibilities of this program during the year ended June 30, 2022. There has been a learning curve that resulted in these oversights. The employee has more experience and knowledge to identify and record adjustments timely.
2022-002 Internal Controls Over Financial Reporting Finding Related to: Compliance ? CDFA No. 14.181 Criteria: : The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the assistance applicants shall submit signed consent forms upon initial application and reexamination. Condition: During the audit, it was noted that Annual Recertifications and Tenant Leases were not signed by tenant. Cause: The Organization had limited access to tenants due to COVID pandemic and the quarantine recommendations in place. Effect: The Organization is not in compliance with HUD?s requirement. Recommendation: We recommend that documents are signed via mail or electronically if in person contact is not available. Auditee Response: We concur with the finding and will ensure that documents are signed by tenants going forward.
2022-003 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance ? CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Fulton Homes, Inc. was required to deposit $2,958 into the replacement reserve during the year ended June 30, 2022. The Organization has not deposited the required reserve amount as of June 30, 2022. Cause: The Organization deposited past due arrearages to the replacement reserve account during the year ended June 30, 2022 and did not realize until after year end that there was an additional $2,958 owed. Effect: South Fulton Homes, Inc. should have deposited $2,958 for the year ended June 30, 2022, in the replacement reserve. South Fulton Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $2,958 be made into the replacement reserve account in order for South Fulton Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Fulton Homes, Inc. concurs with the recommendation. South Fulton Homes, Inc. management had thought it made all the necessary past arrearages. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $2,958 deposit in October 2022.
2022-004 Project Rental Assistance Payment Adjustments Not Made Timely Finding Related to: Compliance ? CDFA No. 14.181 Criteria: Project rental assistance payments are made for qualified tenants that occupy the assisted unit. Cause: Project rental assistance payments were collected for a tenant that had vacated the assisted unit for five months during the year ended June 30, 2022. The adjustment was not identified until the audit was performed. In addition, approved changes to project rental assistance rates were not updated timely on HUD vouchers. Effect: Project rental assistance payments totaled approximately $38,500 for the year ended June 30, 2022. Of this amount approximately $2,200 was paid for a tenant that had vacated the assisted unit for five months during the year ended June 30, 2022. The adjustment was not identified and corrected until the audit was performed. No other instances of payments made for unadjusted vacancies were noted. Recommendation: Develop policies to identify changes in tenant vacancies and rent changes and make adjustments for these changes timely. Auditee Response: South Fulton Homes, Inc. concurs with the recommendation. The adjustments was made in the year ended June 30, 2023. Due to staffing shortages experienced since the COVID pandemic, another employee took over the responsibilities of this program during the year ended June 30, 2022. There has been a learning curve that resulted in these oversights. The employee has more experience and knowledge to identify and record adjustments timely.