Audit 261287

FY End
2022-12-31
Total Expended
$10.79M
Findings
2
Programs
6
Year: 2022 Accepted: 2023-07-16
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
264813 2022-001 Material Weakness - E
841255 2022-001 Material Weakness - E

Contacts

Name Title Type
KDKKQZ3EHZB5 James Butcher Auditee
2108214392 Melissa Boone Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Housing and Community Services, Inc. has elected not to use the 10 - percent de minimis indirect cost rate allowed under the Uniform Guidance. Housing and Community Services, Inc. has received pass-through loans under the federal programs as listed below. The loan balances outstanding at the beginning of the year and current year draws on the loans are included in the federal expenditures presented in the Schedule. The balance of the loans outstanding at December 31, 2022 consist of: MORTGAGE INSURANCE_RENTAL AND COOPERATIVE HOUSING FOR MODERATE INCOME FAMILIES AND ELDERLY, MARKET INTEREST RATE (14.135) - Balances outstanding at the end of the audit period were 11621. COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII (14.228) - Balances outstanding at the end of the audit period were 1945313. COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS (14.218) - Balances outstanding at the end of the audit period were 919803. HOME INVESTMENT PARTNERSHIPS PROGRAM (14.239) - Balances outstanding at the end of the audit period were 4439399.
Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Housing and Community Services, Inc. has elected not to use the 10 - percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Housing and Community Services, Inc. under programs of the federal government for the year ended December 31, 2022. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Housing and Community Services, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Housing and Community Services, Inc.

Finding Details

Department of Housing and Urban Development Finding No. 2022-001; Section 8 Project-Based Cluster (14.195) Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition and Context In connection with our lease file review we noted the following exceptions: ? 3 out of 9 new tenants tested did not have annual EIV-system income verification performed in a timely manner. Cause Management's policies with respect to the determination of eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Identification as a Repeat Finding: No Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code R - Section 8 program administration
Department of Housing and Urban Development Finding No. 2022-001; Section 8 Project-Based Cluster (14.195) Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition and Context In connection with our lease file review we noted the following exceptions: ? 3 out of 9 new tenants tested did not have annual EIV-system income verification performed in a timely manner. Cause Management's policies with respect to the determination of eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Identification as a Repeat Finding: No Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code R - Section 8 program administration