Audit 305780

2023-001 – Income Certifications Federal Program – U.S. Department of Housing and Urban Development Assistance Listing Number 14.181 – Supportive Housing for Persons with Disabilities (Section 811) Material Weakness & Noncompliance Category of Finding – Eligibility Criteria - The Compliance Supplement requires Owners inform tenants, through written notices, about the tenants’ responsibility to provide information necessary to complete annual recertifications. Owners must conduct a recertification of family income and composition at least annually. Owners must then recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Condition - Annual recertifications of family income and composition were not completed and/or were not completed timely. Context - Of the total population of 23 units, 3 units were tested. Two units selected for testing at this property resulted in noncompliance. Based on our sample, inquiry of employees and a master list of late annual recertifications provided by management, we understand the finding to be prevalent at the Corporation throughout the year. Cause - Inexperienced site employees, changes in procedures for processing tenant files, and a global pandemic restricting personal interactions between site employees and tenants all contributed to multiple breakdowns in procedures, which resulted in numerous failures to timely complete the required annual recertifications. Effect - The Corporation was not in compliance with the Compliance Supplement. Rental assistance may be delayed and changes in rental assistance will be effective from the tenants’ annual recertification dates. Any changes in the tenant portion of rent may not take effect until the annual recertifications are complete and may result in a loss of rent. Identification of repeat finding – Yes, 2022-001 Recommendation - This is a repeat finding from 2022. Site managers should receive additional training and be reminded of the procedures in place to ensure that annual recertifications are completed timely. In addition, procedures should be put in place to ensure recertifications continue to be completed when site staff turns over at properties. Management should continue to monitor site staffing and ensure procedures are in-place as back up for site staffing shortages. Views of responsible officials and planned corrective actions - The Corporation agrees with the finding, and has continued to implement strategies to address these issues throughout 2023, including: assembled and deployed a team of temporary workers to assist site staff in completing tenant recertifications, hired a team of 6 additional roving property management/compliance teams to cover open property management positions and to support site staff in completing tenant recertifications, developed a new training program to onboard site staff, and developed a monitoring program to set expectations and hold employees accountable to those expectations.

2023-001 – Income Certifications Federal Program – U.S. Department of Housing and Urban Development Assistance Listing Number 14.181 – Supportive Housing for Persons with Disabilities (Section 811) Material Weakness & Noncompliance Category of Finding – Eligibility Criteria - The Compliance Supplement requires Owners inform tenants, through written notices, about the tenants’ responsibility to provide information necessary to complete annual recertifications. Owners must conduct a recertification of family income and composition at least annually. Owners must then recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Condition - Annual recertifications of family income and composition were not completed and/or were not completed timely. Context - Of the total population of 23 units, 3 units were tested. Two units selected for testing at this property resulted in noncompliance. Based on our sample, inquiry of employees and a master list of late annual recertifications provided by management, we understand the finding to be prevalent at the Corporation throughout the year. Cause - Inexperienced site employees, changes in procedures for processing tenant files, and a global pandemic restricting personal interactions between site employees and tenants all contributed to multiple breakdowns in procedures, which resulted in numerous failures to timely complete the required annual recertifications. Effect - The Corporation was not in compliance with the Compliance Supplement. Rental assistance may be delayed and changes in rental assistance will be effective from the tenants’ annual recertification dates. Any changes in the tenant portion of rent may not take effect until the annual recertifications are complete and may result in a loss of rent. Identification of repeat finding – Yes, 2022-001 Recommendation - This is a repeat finding from 2022. Site managers should receive additional training and be reminded of the procedures in place to ensure that annual recertifications are completed timely. In addition, procedures should be put in place to ensure recertifications continue to be completed when site staff turns over at properties. Management should continue to monitor site staffing and ensure procedures are in-place as back up for site staffing shortages. Views of responsible officials and planned corrective actions - The Corporation agrees with the finding, and has continued to implement strategies to address these issues throughout 2023, including: assembled and deployed a team of temporary workers to assist site staff in completing tenant recertifications, hired a team of 6 additional roving property management/compliance teams to cover open property management positions and to support site staff in completing tenant recertifications, developed a new training program to onboard site staff, and developed a monitoring program to set expectations and hold employees accountable to those expectations.