Audit 31240

Finding 2022-01 Finding Resolution Status: In progress. Information on Universe Population Size: Sampling was not used in the testing. Sample Size Information: No sampling approach was used. Identification of Repeat Finding: Not a repeat finding. Condition: At the commencement of the audit, the Organization notified the firm that there was suspected fraud by a site manager in which personal charges were made on the Organization?s credit card. Criteria: The Organization is required to establish and maintain effective procedures and systems to provide reasonable assurance to deter, mitigate, and identify fraud in a timely fashion. Effect: There was approximately $6,800 of known personal charges through December 31, 2022 which were not recovered by the employee. Context: During November and December 2022, the site manager spent approximately $6,800 on personal items using a company issued credit card. Cause: Credit card reconciliations were not submitted or reviewed during November and December 2022. Questioned Costs: Approximately $6,800. Recommendation: We strongly recommend that a low credit card limit be placed on credit cards or that only managers and directors have credit cards. Management Views and Corrective Action Plan: Management agrees with the finding and Recommendation. Management will implement a system wherein weekly credit card reconciliations will be required for all employees within their first 90 days of employment. Existing employees will be required to submit credit card reconciliations monthly. Failure to comply with the weekly or monthly submission requirements will result in the employee?s credit card being revoked.

Finding 2022-002: Department of Housing and Urban Development, Section 811 capital advance and rental assistance payments, Assistance Listing Number 14.181 Finding Resolution Status: In progress. Information on Universe Population Size: We tested a sample of the fifteen tenant files and examined the activity related to all vacancies. The other findings were general observations while performing the engagement. Sample Size Information: We tested five out of the fifteen tenant files and all activity related to vacancy. The other observations were general observations made while performing the engagement. Identification of Repeat Finding: Not a repeat finding.Federal Award Findings and Questioned Costs Finding 2022-002, continued: Effect: There is a loss of potential revenue due to the long vacancy period. The Organization is not compliant with certain terms of its federal award. Context: During our testing we test the compliance of various terms of the federal award. During our testing, we observed several oversights. Cause: Staff was no in place to assist while the site manager was on leave. Staff to assist while there was turnover in site manager position was also not in place. There was a lack of review of the work performed by site staff. Questioned Costs: None identified. Recommendation: We strongly recommend that there is oversight of site personnel and all personnel receive training on the compliance requirements of a HUD property. Management Views and Corrective Action Plan: Management agrees with the finding and Recommendation. Management will provide oversight of site personnel and will ensure that staff receive the appropriate HUD compliance training. Auditors? Summary of the Auditees? Comments on the Finding and Recommendations: Comments provided appear appropriate. Condition: We noted during the year, there was a lack of ongoing oversight of the property which permitted: 1. A unit to go vacant for more than 18 months, 2. Required annual unit inspections to not be performed on most units during 2022; 3. The documentation for one unit?s annual recertification was not complete. 4. Timing updates not to be made to the tenant selection plan or the fair housing plan. 5. A lack of upkeeping of the waiting list. Criteria: The Organization is required to establish and maintain effective procedures and systems to provide reasonable assurance that the Organization is managing its federal award in compliance with federal statues, regulations, and the terms and conditions of the federal award

Finding 2022-01 Finding Resolution Status: In progress. Information on Universe Population Size: Sampling was not used in the testing. Sample Size Information: No sampling approach was used. Identification of Repeat Finding: Not a repeat finding. Condition: At the commencement of the audit, the Organization notified the firm that there was suspected fraud by a site manager in which personal charges were made on the Organization?s credit card. Criteria: The Organization is required to establish and maintain effective procedures and systems to provide reasonable assurance to deter, mitigate, and identify fraud in a timely fashion. Effect: There was approximately $6,800 of known personal charges through December 31, 2022 which were not recovered by the employee. Context: During November and December 2022, the site manager spent approximately $6,800 on personal items using a company issued credit card. Cause: Credit card reconciliations were not submitted or reviewed during November and December 2022. Questioned Costs: Approximately $6,800. Recommendation: We strongly recommend that a low credit card limit be placed on credit cards or that only managers and directors have credit cards. Management Views and Corrective Action Plan: Management agrees with the finding and Recommendation. Management will implement a system wherein weekly credit card reconciliations will be required for all employees within their first 90 days of employment. Existing employees will be required to submit credit card reconciliations monthly. Failure to comply with the weekly or monthly submission requirements will result in the employee?s credit card being revoked.

Finding 2022-002: Department of Housing and Urban Development, Section 811 capital advance and rental assistance payments, Assistance Listing Number 14.181 Finding Resolution Status: In progress. Information on Universe Population Size: We tested a sample of the fifteen tenant files and examined the activity related to all vacancies. The other findings were general observations while performing the engagement. Sample Size Information: We tested five out of the fifteen tenant files and all activity related to vacancy. The other observations were general observations made while performing the engagement. Identification of Repeat Finding: Not a repeat finding.Federal Award Findings and Questioned Costs Finding 2022-002, continued: Effect: There is a loss of potential revenue due to the long vacancy period. The Organization is not compliant with certain terms of its federal award. Context: During our testing we test the compliance of various terms of the federal award. During our testing, we observed several oversights. Cause: Staff was no in place to assist while the site manager was on leave. Staff to assist while there was turnover in site manager position was also not in place. There was a lack of review of the work performed by site staff. Questioned Costs: None identified. Recommendation: We strongly recommend that there is oversight of site personnel and all personnel receive training on the compliance requirements of a HUD property. Management Views and Corrective Action Plan: Management agrees with the finding and Recommendation. Management will provide oversight of site personnel and will ensure that staff receive the appropriate HUD compliance training. Auditors? Summary of the Auditees? Comments on the Finding and Recommendations: Comments provided appear appropriate. Condition: We noted during the year, there was a lack of ongoing oversight of the property which permitted: 1. A unit to go vacant for more than 18 months, 2. Required annual unit inspections to not be performed on most units during 2022; 3. The documentation for one unit?s annual recertification was not complete. 4. Timing updates not to be made to the tenant selection plan or the fair housing plan. 5. A lack of upkeeping of the waiting list. Criteria: The Organization is required to establish and maintain effective procedures and systems to provide reasonable assurance that the Organization is managing its federal award in compliance with federal statues, regulations, and the terms and conditions of the federal award