Audit 304344

Finding No. 2023-001 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition During the year ended 2023, the security deposit cash account was not fully funded during various times throughout the year. Cause The bank erroneously transferred dormant account balances as escheated funds to the State of Connecticut in the name of the tenant. Effect or Potential Effect The tenant security deposit cash account was underfunded and did not cover the security deposit liability as of December 31, 2023. Questioned Costs None Context Security deposit cash is underfunded by $7,414. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding: 2022-001) Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Auditor Noncompliance Code: M - Security deposits Recommendations 2023-001-a Management should transfer $7,414 from the operating account in order to fully fund the tenant security deposits account. Views of Responsible Officials and Planned Corrective Actions The refunded dormant accounts had residents that were moved out or deceased. The remaining current residents were notified of the deficiency, but there were no responses or payments received by year-end. The account was funded appropriately with operating monies in January 2024.

Finding No. 2023-001 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition During the year ended 2023, the security deposit cash account was not fully funded during various times throughout the year. Cause The bank erroneously transferred dormant account balances as escheated funds to the State of Connecticut in the name of the tenant. Effect or Potential Effect The tenant security deposit cash account was underfunded and did not cover the security deposit liability as of December 31, 2023. Questioned Costs None Context Security deposit cash is underfunded by $7,414. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding: 2022-001) Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Auditor Noncompliance Code: M - Security deposits Recommendations 2023-001-a Management should transfer $7,414 from the operating account in order to fully fund the tenant security deposits account. Views of Responsible Officials and Planned Corrective Actions The refunded dormant accounts had residents that were moved out or deceased. The remaining current residents were notified of the deficiency, but there were no responses or payments received by year-end. The account was funded appropriately with operating monies in January 2024.

Finding No. 2023-002 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition The Project did not maintain evidence in the lease file to support review of the Enterprise Income Verification ("EIV") system within 90 days of the tenant moving into the Project. Cause Policies and procedures, which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines, were not followed. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A noncompliance was found in the one move in that was tested. Identification as a Repeat Finding This is not a repeat finding. Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: Z - Other Recommendations Management should monitor compliance with established procedures to ensure the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Views of Responsible Officials and Planned Corrective Actions The compliance monitoring report has now been completed. Staff reviewed the policies and procedures to prevent future occurrences.

Finding No. 2023-002 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition The Project did not maintain evidence in the lease file to support review of the Enterprise Income Verification ("EIV") system within 90 days of the tenant moving into the Project. Cause Policies and procedures, which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines, were not followed. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A noncompliance was found in the one move in that was tested. Identification as a Repeat Finding This is not a repeat finding. Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: Z - Other Recommendations Management should monitor compliance with established procedures to ensure the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Views of Responsible Officials and Planned Corrective Actions The compliance monitoring report has now been completed. Staff reviewed the policies and procedures to prevent future occurrences.

Finding No. 2023-001 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition During the year ended 2023, the security deposit cash account was not fully funded during various times throughout the year. Cause The bank erroneously transferred dormant account balances as escheated funds to the State of Connecticut in the name of the tenant. Effect or Potential Effect The tenant security deposit cash account was underfunded and did not cover the security deposit liability as of December 31, 2023. Questioned Costs None Context Security deposit cash is underfunded by $7,414. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding: 2022-001) Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Auditor Noncompliance Code: M - Security deposits Recommendations 2023-001-a Management should transfer $7,414 from the operating account in order to fully fund the tenant security deposits account. Views of Responsible Officials and Planned Corrective Actions The refunded dormant accounts had residents that were moved out or deceased. The remaining current residents were notified of the deficiency, but there were no responses or payments received by year-end. The account was funded appropriately with operating monies in January 2024.

Finding No. 2023-001 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition During the year ended 2023, the security deposit cash account was not fully funded during various times throughout the year. Cause The bank erroneously transferred dormant account balances as escheated funds to the State of Connecticut in the name of the tenant. Effect or Potential Effect The tenant security deposit cash account was underfunded and did not cover the security deposit liability as of December 31, 2023. Questioned Costs None Context Security deposit cash is underfunded by $7,414. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding: 2022-001) Criteria In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to establish and maintain at all times a fully funded separate bank account for tenant security deposits collected. Auditor Noncompliance Code: M - Security deposits Recommendations 2023-001-a Management should transfer $7,414 from the operating account in order to fully fund the tenant security deposits account. Views of Responsible Officials and Planned Corrective Actions The refunded dormant accounts had residents that were moved out or deceased. The remaining current residents were notified of the deficiency, but there were no responses or payments received by year-end. The account was funded appropriately with operating monies in January 2024.

Finding No. 2023-002 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition The Project did not maintain evidence in the lease file to support review of the Enterprise Income Verification ("EIV") system within 90 days of the tenant moving into the Project. Cause Policies and procedures, which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines, were not followed. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A noncompliance was found in the one move in that was tested. Identification as a Repeat Finding This is not a repeat finding. Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: Z - Other Recommendations Management should monitor compliance with established procedures to ensure the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Views of Responsible Officials and Planned Corrective Actions The compliance monitoring report has now been completed. Staff reviewed the policies and procedures to prevent future occurrences.

Finding No. 2023-002 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Statement of Condition The Project did not maintain evidence in the lease file to support review of the Enterprise Income Verification ("EIV") system within 90 days of the tenant moving into the Project. Cause Policies and procedures, which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines, were not followed. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A noncompliance was found in the one move in that was tested. Identification as a Repeat Finding This is not a repeat finding. Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: Z - Other Recommendations Management should monitor compliance with established procedures to ensure the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Views of Responsible Officials and Planned Corrective Actions The compliance monitoring report has now been completed. Staff reviewed the policies and procedures to prevent future occurrences.