2023-001 – Eligibility - Tenant File Documentation (Repeated from Prior Year)
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments for applying residents and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of 8 tenant files, we noted:
1) One out of eight instances where a tenant EIV was not run within 90 days of move in;
2) One out of eight instances where a tenant's saving and checking accounts were not verified by a third party;
3) One out of eight instances where the incorrect balance was used to determine the tenant's checking account balance;
4) Two out of eight instances where a copy of the tenant's security deposit was not maintained in the tenant file;
Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements.
Effect. As a result of this condition, certain tenant files did not contain all required supporting documentation.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend management strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend management ensure all proper supporting documentation is maintained in the residents' files.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-002 – Replacement Reserve Withdrawals
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for obtaining proper documentation and approval by HUD for any withdrawals made from the replacement reserve. Such withdrawals should only be made for qualifying items that have not been previously reimbursed out of the reserve.
Condition. Certain capital expenditures, amounting to $6,135, were requested and reimbursed from the reserve for replacements after already having been requested and reimbursed from the reserve. Management corrected this oversight and transferred the duplicate reimbursed funds from the Project's operating account to the reserve for replacements in May 2024.
Cause. Management has not properly implemented internal control procedures to ensure previously reimbursed items are not requested for reimbursement from the reserve for replacements again.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend that management review all requested items to be approved and ensure they have not been previously approved for reimbursement from the replacement reserve.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-003 – Replacement Reserve Account
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is required to maintain replacement reserve funds in a interest bearing account.
Condition. The replacement reserve balance was not maintained in an interest bearing account during 2023.
Cause. Management has not properly implemented procedures to comply with HUD program requirements related to holding the reserve balance in an interest bearing account.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023 as no interest was earned.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
"Recommendation. We recommend that management move funds to an interest bearing account.
"
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-001 – Eligibility - Tenant File Documentation (Repeated from Prior Year)
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments for applying residents and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of 8 tenant files, we noted:
1) One out of eight instances where a tenant EIV was not run within 90 days of move in;
2) One out of eight instances where a tenant's saving and checking accounts were not verified by a third party;
3) One out of eight instances where the incorrect balance was used to determine the tenant's checking account balance;
4) Two out of eight instances where a copy of the tenant's security deposit was not maintained in the tenant file;
Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements.
Effect. As a result of this condition, certain tenant files did not contain all required supporting documentation.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend management strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend management ensure all proper supporting documentation is maintained in the residents' files.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-002 – Replacement Reserve Withdrawals
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for obtaining proper documentation and approval by HUD for any withdrawals made from the replacement reserve. Such withdrawals should only be made for qualifying items that have not been previously reimbursed out of the reserve.
Condition. Certain capital expenditures, amounting to $6,135, were requested and reimbursed from the reserve for replacements after already having been requested and reimbursed from the reserve. Management corrected this oversight and transferred the duplicate reimbursed funds from the Project's operating account to the reserve for replacements in May 2024.
Cause. Management has not properly implemented internal control procedures to ensure previously reimbursed items are not requested for reimbursement from the reserve for replacements again.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend that management review all requested items to be approved and ensure they have not been previously approved for reimbursement from the replacement reserve.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-003 – Replacement Reserve Account
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is required to maintain replacement reserve funds in a interest bearing account.
Condition. The replacement reserve balance was not maintained in an interest bearing account during 2023.
Cause. Management has not properly implemented procedures to comply with HUD program requirements related to holding the reserve balance in an interest bearing account.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023 as no interest was earned.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
"Recommendation. We recommend that management move funds to an interest bearing account.
"
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-001 – Eligibility - Tenant File Documentation (Repeated from Prior Year)
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments for applying residents and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of 8 tenant files, we noted:
1) One out of eight instances where a tenant EIV was not run within 90 days of move in;
2) One out of eight instances where a tenant's saving and checking accounts were not verified by a third party;
3) One out of eight instances where the incorrect balance was used to determine the tenant's checking account balance;
4) Two out of eight instances where a copy of the tenant's security deposit was not maintained in the tenant file;
Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements.
Effect. As a result of this condition, certain tenant files did not contain all required supporting documentation.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend management strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend management ensure all proper supporting documentation is maintained in the residents' files.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-002 – Replacement Reserve Withdrawals
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for obtaining proper documentation and approval by HUD for any withdrawals made from the replacement reserve. Such withdrawals should only be made for qualifying items that have not been previously reimbursed out of the reserve.
Condition. Certain capital expenditures, amounting to $6,135, were requested and reimbursed from the reserve for replacements after already having been requested and reimbursed from the reserve. Management corrected this oversight and transferred the duplicate reimbursed funds from the Project's operating account to the reserve for replacements in May 2024.
Cause. Management has not properly implemented internal control procedures to ensure previously reimbursed items are not requested for reimbursement from the reserve for replacements again.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend that management review all requested items to be approved and ensure they have not been previously approved for reimbursement from the replacement reserve.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-003 – Replacement Reserve Account
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is required to maintain replacement reserve funds in a interest bearing account.
Condition. The replacement reserve balance was not maintained in an interest bearing account during 2023.
Cause. Management has not properly implemented procedures to comply with HUD program requirements related to holding the reserve balance in an interest bearing account.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023 as no interest was earned.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
"Recommendation. We recommend that management move funds to an interest bearing account.
"
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-001 – Eligibility - Tenant File Documentation (Repeated from Prior Year)
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments for applying residents and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of 8 tenant files, we noted:
1) One out of eight instances where a tenant EIV was not run within 90 days of move in;
2) One out of eight instances where a tenant's saving and checking accounts were not verified by a third party;
3) One out of eight instances where the incorrect balance was used to determine the tenant's checking account balance;
4) Two out of eight instances where a copy of the tenant's security deposit was not maintained in the tenant file;
Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements.
Effect. As a result of this condition, certain tenant files did not contain all required supporting documentation.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend management strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend management ensure all proper supporting documentation is maintained in the residents' files.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-002 – Replacement Reserve Withdrawals
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for obtaining proper documentation and approval by HUD for any withdrawals made from the replacement reserve. Such withdrawals should only be made for qualifying items that have not been previously reimbursed out of the reserve.
Condition. Certain capital expenditures, amounting to $6,135, were requested and reimbursed from the reserve for replacements after already having been requested and reimbursed from the reserve. Management corrected this oversight and transferred the duplicate reimbursed funds from the Project's operating account to the reserve for replacements in May 2024.
Cause. Management has not properly implemented internal control procedures to ensure previously reimbursed items are not requested for reimbursement from the reserve for replacements again.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend that management review all requested items to be approved and ensure they have not been previously approved for reimbursement from the replacement reserve.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2023-003 – Replacement Reserve Account
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Special Tests and Provisions)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is required to maintain replacement reserve funds in a interest bearing account.
Condition. The replacement reserve balance was not maintained in an interest bearing account during 2023.
Cause. Management has not properly implemented procedures to comply with HUD program requirements related to holding the reserve balance in an interest bearing account.
Effect. As a result of this condition, the reserve for replacements account was underfunded during 2023 as no interest was earned.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
"Recommendation. We recommend that management move funds to an interest bearing account.
"
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.