Audit 300427

Agency and Award: U.S. Department of Housing and Urban Development ALN Number: 14.157, Supportive Housing for the Elderly Nonmaterial Compliance - Eligibility Criteria: As it relates to Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Uniform Guidance requires that the owner is responsible for annually reexamining incomes of households occupying assisted units and making appropriate adjustments to the tenant payment and the project rental assistance payment in accordance with applicable federal laws, regulations, and standards identified in 24 CFR 891.410(g)—Reexamination of household family income and composition—(1) Regular reexaminations. The Owner must reexamine the income and composition of the household at least every 12 months. Upon verification of the information, the Owner must make appropriate adjustments in the total tenant payment and must determine whether the household's unit size is still appropriate. The Owner must adjust tenant payment and the project rental assistance payment and must carry out any unit transfer in accordance with HUD standards. Condition: During our review of eligibility testing support, we noted that for the tenant’s annual re-examinations and certifications under HUD Project Rental Assistance Contract Number FL29-S951-006, the incorrect amount of contract rent was being utilized on the forms to calculate the Project’s tenant assistance payment. The Project incorrectly double counted the utility allowance of $51 and was using a gross rent rate of $833 to calculate the tenant rental assistance payment when it should have only used a gross rent rate of $782 per the contact. This resulted in the Project requesting a tenant rental assistance payment that was $51 more than what it should have been for each tenant on the Housing Owner’s Certification and Application for Housing Assistance Payments (HAP) for three months of fiscal year 2023. Upon the Project’s analysis, it was determined that the total amount of the error, net of vacancies, was $14,724. Questioned Costs: ALN Number 14.157 was overstated on the Schedule by $14,724. Context: It was noted that the Project collected more money each month from HUD as a result of incorrectly including the utility allowance as part of the contract rent for the first three months of the year ended June 30, 2023. Effect: Incorrect rates were utilized to calculate the project tenant rental assistance payments. These incorrect rates were paid by HUD to the Project resulting in an overpayment of funds in the amount of $14,724. Cause: The Project relies heavily on a few key individuals to perform review of the tenant certifications and re-examinations. While this process of review did occur, the incorrect rents approved went undetected during the Project’s internal review process. Recommendation: We recommend that the Project establish procedures to ensure that there is a better process to check the amounts of contract rent being approved on the reexaminations and certifications of tenants. Additionally, we recommend that the monthly HAP forms are more closely reviewed by the appropriate personnel to ensure that the amounts being requested of HUD are in line with the appropriate contract rates. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.

Agency and Award: U.S. Department of Housing and Urban Development ALN Number: 14.157, Supportive Housing for the Elderly Nonmaterial Compliance - Eligibility Criteria: As it relates to Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Uniform Guidance requires that the owner is responsible for annually reexamining incomes of households occupying assisted units and making appropriate adjustments to the tenant payment and the project rental assistance payment in accordance with applicable federal laws, regulations, and standards identified in 24 CFR 891.410(g)—Reexamination of household family income and composition—(1) Regular reexaminations. The Owner must reexamine the income and composition of the household at least every 12 months. Upon verification of the information, the Owner must make appropriate adjustments in the total tenant payment and must determine whether the household's unit size is still appropriate. The Owner must adjust tenant payment and the project rental assistance payment and must carry out any unit transfer in accordance with HUD standards. Condition: During our review of eligibility testing support, we noted that for the tenant’s annual re-examinations and certifications under HUD Project Rental Assistance Contract Number FL29-S951-006, the incorrect amount of contract rent was being utilized on the forms to calculate the Project’s tenant assistance payment. The Project incorrectly double counted the utility allowance of $51 and was using a gross rent rate of $833 to calculate the tenant rental assistance payment when it should have only used a gross rent rate of $782 per the contact. This resulted in the Project requesting a tenant rental assistance payment that was $51 more than what it should have been for each tenant on the Housing Owner’s Certification and Application for Housing Assistance Payments (HAP) for three months of fiscal year 2023. Upon the Project’s analysis, it was determined that the total amount of the error, net of vacancies, was $14,724. Questioned Costs: ALN Number 14.157 was overstated on the Schedule by $14,724. Context: It was noted that the Project collected more money each month from HUD as a result of incorrectly including the utility allowance as part of the contract rent for the first three months of the year ended June 30, 2023. Effect: Incorrect rates were utilized to calculate the project tenant rental assistance payments. These incorrect rates were paid by HUD to the Project resulting in an overpayment of funds in the amount of $14,724. Cause: The Project relies heavily on a few key individuals to perform review of the tenant certifications and re-examinations. While this process of review did occur, the incorrect rents approved went undetected during the Project’s internal review process. Recommendation: We recommend that the Project establish procedures to ensure that there is a better process to check the amounts of contract rent being approved on the reexaminations and certifications of tenants. Additionally, we recommend that the monthly HAP forms are more closely reviewed by the appropriate personnel to ensure that the amounts being requested of HUD are in line with the appropriate contract rates. Repeat Finding: Yes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.