U.S. Department of Housing and Urban Development 14.157 ? Supportive Housing for the Elderly Section 202 Capital Advance 2022-001 Tenant Files Condition: Move-ins: 1. In one (1) instance out of nine (9) tenant files tested, the employment income reported on Form HUD-50059 was $11,400; however, the supporting documentation verified in the tenant file, indicated $15,678 ($10,05 per hour for 30 hours per week, over 52 weeks). 2. In one (1) instance out of nine (9) tenant files tested, the ?Non-Smoking Lease Addendum? was not signed by management. 3. In one (1) instance out of nine (9) tenant files tested, the ?Non-Smoking Lease Addendum? identified the Project as Terra Quest, Inc. 4. In three (3) instances out of nine (9) tenant files tested, the Security Deposit Agreement was not maintained in the tenant?s file. 5. In three (3) instances out of nine (9) tenant files tested, the Security Deposit Agreement was not signed by management. Recertification: 1. In one (1) instance out of eight (8) tenant files tested, the Notice and Consent for the Release of Information (Form 9887) was not dated by the tenant. 2. In one (1) instance out of eight (8) tenant files tested, the Applicant?s/Tenant?s Consent to the Release of Information (Form 9887-A) was not dated by the tenant. 3. In one (1) instance out of eight (8) tenant files tested, the Verification of Criminal Background Check form was not signed by the tenant. 4. In one (1) instance out of eight (8) tenant files tested, the Form HUD-50059 was not dated by the tenant. 5. In one (1) instance out of eight (8) tenant files tested, the ?EIV? document was not maintained in the tenant file, for verification of the tenant?s income. 6. In one (1) instance out of eight (8) tenant files tested, the Housing quality inspection form was not maintained in the tenant?s file. 7. In one (1) instance out of eight (8) tenant files tested, the ?Lease Addendum, for Violence Against Women and Justice Department Reauthorization Act of 2005? was not dated by the tenant. 8. In five (5) instances out of eight (8) tenant files tested, the ?Notification of rent increase resulting from recertification process ? Section 202 PRAC?s form? was not maintained the tenant?s file. 9. In one (1) instance out of eight (8) tenant files tested, the ?Notification of rent increase resulting from recertification process ? Section 202 PRAC?s form? was addressed to another tenant. 10. In one (1) instance out of eight (8) tenant files tested, the Quality Assurance Information form was not dated by the tenant. Move-outs: 1. In one (1) instance out of three (3) tenant files selected for testing, the tenant file could not be located. 2. In one (1) instance out of two (2) tenant files tested, the security deposit disposition notice was not maintained in the tenant file. Criteria: HUD 4350.3, REV-1, Change 4, Ch. 5, 5-12.B. Timeframe for Conducting Verifications. Verifications should be conducted at the following three times. 1. Owners must verify income, assets, expenses, and deductions and all eligibility requirements prior to move-in. 2. Owners must verify each family?s income, assets, expenses, and deductions as part of the annual recertification process. 3. Owners must verify changes in income, allowances, or family characteristics reported between annual recertification. HUD Handbook 4350.3, Rev 1, Change 4, Ch. 5, 5-31, F. In all cases, the computer generated HUD-50059 must include the required tenant signatures and owner signatures prior to submitting the data to the Contract Administrator or HUD. The owner must document within the file why the signature(s) was not obtained and, if applicable, when the signature(s) will be obtained. 24 CFR ?891.400(b): The Owner is responsible for all management functions. These functions include selection and admission of tenants, required reexaminations of incomes for households occupying assisted units or residential spaces, collection of tenant payments, termination of tenancy and eviction. HUD 4350.3 REV-1, Change 4, Ch. 6: 6-29.A. Owners perform unit inspections on at least an annual basis to determine whether the appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced. This is also an opportunity to determine any damage to the unit caused by the tenant's abuse or negligence and, if so, make the necessary repairs and bill the tenant for the cost of the repairs. In addition, prior to the tenant occupying the unit the following procedures should be performed: 1. The Notification of rent increase resulting from recertification processing ? Section 202 PRAC?s form, indicating the adjusted rent, should be signed by the management agent. 2. Obtain the tenant?s signature on the Quality Assurance form. 3. Obtain the tenant?s signature on the Notice and Consent for the Release of Information (Form 9887) and maintained the document in the tenant?s file. 4. The management agent should sign the Applicant's/Tenant's Consent to the Release of Information (Form 9887-A), in addition to obtaining the tenant signature, and maintain the document in the tenant?s file. In addition, prior to the tenant occupying the unit the following procedures should be performed: 5. The management agent should sign the Lease Addendum, for Violence Against Women and Justice Department Reauthorization Act of 2005, in addition to obtaining the tenant signature, and maintain the document in the tenant?s file. 6. The management agent must determine the tenant?s rent based on the proper verification of the tenant?s income. Effect: The tenant files were not always in compliance with the guidelines established by the Department of Housing and Urban Development. Cause: Required documents were not always maintained in the tenant file, in addition to being properly authorized by the tenant and/or owner. Context: Tenant files tested consisted of move-ins, recertifications and move-outs. Population Size Number: 50 Tenants Files. Dollar Amount: $ 238,091. Sample Number: 20 Tenants Files. Dollar Amount: $ 95,240. Items Not in Compliance Number: 9 Tenant Files. Dollar Amount: $ 42,858. Questioned Costs There was no questioned costs. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Ridgeview Terrace, Inc. process applicants and tenants, including recertification of tenants in accordance with guidelines established by the Department of Housing and Urban Development prior to the tenant occupying the unit. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Corrected going forward.
U.S. Department of Housing and Urban Development 14.157 ? Supportive Housing for the Elderly Section 202 Capital Advance 2022-002 Payroll Expense Condition: Payroll expense for the Resident Manager and Maintenance, was based on an estimated percentage. There was no timesheets or time study prepared, during the 2022 calendar year. Criteria: The allowability of costs requires that the expense must be adequately documented. Effect: Payroll expense for the Resident Manager and Maintenance, was not adequately documented, during the 2022 calendar year, resulting in potential questioned cost of $75,984.06. Cause: Payroll expense was based on an estimate of labor performed between the two Projects, who employed the Resident Manager and the Maintenance staff. Context: Payroll expense during the calendar year for the Resident Manager and the Maintenance staff. Population Size Number: 3 employees for 24 pay periods. Dollar Amount: $ 75,984.06. Sample Number: 3 employees for 3 pay periods. Dollar Amount: $ 11,032.34. Items Not in Compliance Number: 3 employees for 24 pay periods. Dollar Amount: $ 11,032.34. Questioned Costs There is potential questioned cost of $75,984.06. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Ridgeview Terrace, Inc., prepare timesheets or perform a time study, in order to properly report payroll expense for the Resident Manager and the Maintenance staff. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Moving to new payroll system.
U.S. Department of Housing and Urban Development 14.157 ? Supportive Housing for the Elderly Section 202 Capital Advance 2022-003 Criteria: Front-line costs activities include the following: 1) taking applications; 2) screening, certifying and recertifying residents; 3) maintaining the project; and 4) accounting for project income and expenses. Effect: Administration expenses allocated from the Corporate office should be processed through the management fee, resulting in potential questioned cost of $18,381.70. Cause: Misinterpretation by management with regards to Front-line costs and expenses charged to the management fee. Context: Administration expense allocated to the Project, during the 2022 calendar year. Population Size Number: 24 allocations of administration expenses Dollar Amount: $ 18,381.70. charged to the Project. Sample Number: 2 allocation periods. Dollar Amount: $ 1,250.81. Items Not in Compliance Number: 2 allocation periods. Dollar Amount: $ 1,250.81. Questioned Costs There is potential questioned cost of $18,381.70. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Ridgeview Terrace, Inc., record Administration expense as part of the management fee for the Project. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Have stopped allocating cost.
U.S. Department of Housing and Urban Development 14.157 ? Supportive Housing for the Elderly Section 202 Capital Advance 2022-001 Tenant Files Condition: Move-ins: 1. In one (1) instance out of nine (9) tenant files tested, the employment income reported on Form HUD-50059 was $11,400; however, the supporting documentation verified in the tenant file, indicated $15,678 ($10,05 per hour for 30 hours per week, over 52 weeks). 2. In one (1) instance out of nine (9) tenant files tested, the ?Non-Smoking Lease Addendum? was not signed by management. 3. In one (1) instance out of nine (9) tenant files tested, the ?Non-Smoking Lease Addendum? identified the Project as Terra Quest, Inc. 4. In three (3) instances out of nine (9) tenant files tested, the Security Deposit Agreement was not maintained in the tenant?s file. 5. In three (3) instances out of nine (9) tenant files tested, the Security Deposit Agreement was not signed by management. Recertification: 1. In one (1) instance out of eight (8) tenant files tested, the Notice and Consent for the Release of Information (Form 9887) was not dated by the tenant. 2. In one (1) instance out of eight (8) tenant files tested, the Applicant?s/Tenant?s Consent to the Release of Information (Form 9887-A) was not dated by the tenant. 3. In one (1) instance out of eight (8) tenant files tested, the Verification of Criminal Background Check form was not signed by the tenant. 4. In one (1) instance out of eight (8) tenant files tested, the Form HUD-50059 was not dated by the tenant. 5. In one (1) instance out of eight (8) tenant files tested, the ?EIV? document was not maintained in the tenant file, for verification of the tenant?s income. 6. In one (1) instance out of eight (8) tenant files tested, the Housing quality inspection form was not maintained in the tenant?s file. 7. In one (1) instance out of eight (8) tenant files tested, the ?Lease Addendum, for Violence Against Women and Justice Department Reauthorization Act of 2005? was not dated by the tenant. 8. In five (5) instances out of eight (8) tenant files tested, the ?Notification of rent increase resulting from recertification process ? Section 202 PRAC?s form? was not maintained the tenant?s file. 9. In one (1) instance out of eight (8) tenant files tested, the ?Notification of rent increase resulting from recertification process ? Section 202 PRAC?s form? was addressed to another tenant. 10. In one (1) instance out of eight (8) tenant files tested, the Quality Assurance Information form was not dated by the tenant. Move-outs: 1. In one (1) instance out of three (3) tenant files selected for testing, the tenant file could not be located. 2. In one (1) instance out of two (2) tenant files tested, the security deposit disposition notice was not maintained in the tenant file. Criteria: HUD 4350.3, REV-1, Change 4, Ch. 5, 5-12.B. Timeframe for Conducting Verifications. Verifications should be conducted at the following three times. 1. Owners must verify income, assets, expenses, and deductions and all eligibility requirements prior to move-in. 2. Owners must verify each family?s income, assets, expenses, and deductions as part of the annual recertification process. 3. Owners must verify changes in income, allowances, or family characteristics reported between annual recertification. HUD Handbook 4350.3, Rev 1, Change 4, Ch. 5, 5-31, F. In all cases, the computer generated HUD-50059 must include the required tenant signatures and owner signatures prior to submitting the data to the Contract Administrator or HUD. The owner must document within the file why the signature(s) was not obtained and, if applicable, when the signature(s) will be obtained. 24 CFR ?891.400(b): The Owner is responsible for all management functions. These functions include selection and admission of tenants, required reexaminations of incomes for households occupying assisted units or residential spaces, collection of tenant payments, termination of tenancy and eviction. HUD 4350.3 REV-1, Change 4, Ch. 6: 6-29.A. Owners perform unit inspections on at least an annual basis to determine whether the appliances and equipment in the unit are functioning properly and to assess whether a component needs to be repaired or replaced. This is also an opportunity to determine any damage to the unit caused by the tenant's abuse or negligence and, if so, make the necessary repairs and bill the tenant for the cost of the repairs. In addition, prior to the tenant occupying the unit the following procedures should be performed: 1. The Notification of rent increase resulting from recertification processing ? Section 202 PRAC?s form, indicating the adjusted rent, should be signed by the management agent. 2. Obtain the tenant?s signature on the Quality Assurance form. 3. Obtain the tenant?s signature on the Notice and Consent for the Release of Information (Form 9887) and maintained the document in the tenant?s file. 4. The management agent should sign the Applicant's/Tenant's Consent to the Release of Information (Form 9887-A), in addition to obtaining the tenant signature, and maintain the document in the tenant?s file. In addition, prior to the tenant occupying the unit the following procedures should be performed: 5. The management agent should sign the Lease Addendum, for Violence Against Women and Justice Department Reauthorization Act of 2005, in addition to obtaining the tenant signature, and maintain the document in the tenant?s file. 6. The management agent must determine the tenant?s rent based on the proper verification of the tenant?s income. Effect: The tenant files were not always in compliance with the guidelines established by the Department of Housing and Urban Development. Cause: Required documents were not always maintained in the tenant file, in addition to being properly authorized by the tenant and/or owner. Context: Tenant files tested consisted of move-ins, recertifications and move-outs. Population Size Number: 50 Tenants Files. Dollar Amount: $ 238,091. Sample Number: 20 Tenants Files. Dollar Amount: $ 95,240. Items Not in Compliance Number: 9 Tenant Files. Dollar Amount: $ 42,858. Questioned Costs There was no questioned costs. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Ridgeview Terrace, Inc. process applicants and tenants, including recertification of tenants in accordance with guidelines established by the Department of Housing and Urban Development prior to the tenant occupying the unit. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Corrected going forward.
U.S. Department of Housing and Urban Development 14.157 ? Supportive Housing for the Elderly Section 202 Capital Advance 2022-002 Payroll Expense Condition: Payroll expense for the Resident Manager and Maintenance, was based on an estimated percentage. There was no timesheets or time study prepared, during the 2022 calendar year. Criteria: The allowability of costs requires that the expense must be adequately documented. Effect: Payroll expense for the Resident Manager and Maintenance, was not adequately documented, during the 2022 calendar year, resulting in potential questioned cost of $75,984.06. Cause: Payroll expense was based on an estimate of labor performed between the two Projects, who employed the Resident Manager and the Maintenance staff. Context: Payroll expense during the calendar year for the Resident Manager and the Maintenance staff. Population Size Number: 3 employees for 24 pay periods. Dollar Amount: $ 75,984.06. Sample Number: 3 employees for 3 pay periods. Dollar Amount: $ 11,032.34. Items Not in Compliance Number: 3 employees for 24 pay periods. Dollar Amount: $ 11,032.34. Questioned Costs There is potential questioned cost of $75,984.06. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Ridgeview Terrace, Inc., prepare timesheets or perform a time study, in order to properly report payroll expense for the Resident Manager and the Maintenance staff. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Moving to new payroll system.
U.S. Department of Housing and Urban Development 14.157 ? Supportive Housing for the Elderly Section 202 Capital Advance 2022-003 Criteria: Front-line costs activities include the following: 1) taking applications; 2) screening, certifying and recertifying residents; 3) maintaining the project; and 4) accounting for project income and expenses. Effect: Administration expenses allocated from the Corporate office should be processed through the management fee, resulting in potential questioned cost of $18,381.70. Cause: Misinterpretation by management with regards to Front-line costs and expenses charged to the management fee. Context: Administration expense allocated to the Project, during the 2022 calendar year. Population Size Number: 24 allocations of administration expenses Dollar Amount: $ 18,381.70. charged to the Project. Sample Number: 2 allocation periods. Dollar Amount: $ 1,250.81. Items Not in Compliance Number: 2 allocation periods. Dollar Amount: $ 1,250.81. Questioned Costs There is potential questioned cost of $18,381.70. Recommendation: In order to be in compliance with guidelines established by the Department of Housing and Urban Development, I recommend that Ridgeview Terrace, Inc., record Administration expense as part of the management fee for the Project. By performing these procedures, the risk of incurring questioned costs will be significantly reduced. Views of Responsible Officials and Planned Corrective Actions: Have stopped allocating cost.