Finding reference number: 2019-001
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: Z - Other
Finding resolution status: Resolved
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2019-001: For the year ended December 31, 2019, the Corporation did not submit audited financial statements to HUD within the required time period.
Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to electronically submit audited financial statements to HUD in accordance with HUD guidance.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement.
Cause: Due to administrative delays caused by the transition in management agents, the Corporation failed to submit audited financial statements to HUD within the time period required.
Recommendation: The Corporation should submit audited financial statements to HUD within the time period required.
Reporting views of responsible officials: Management agrees with the recommendation and submitted the audited financial statements to HUD. No further action is required.
Finding reference number: 2019-002
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: B - Failure to make required residual receipt deposit
Finding resolution status: In process
Universe population size: One required deposit to the residual receipts account
Sample size information: One required deposit to the residual receipts account
Statistically valid sample: Yes
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $33,820
Statement of condition 2019-002: The Corporation did not make the required deposit to the residual receipts fund in the amount of $33,820.
Criteria: Pursuant to the Regulatory Agreement, PY surplus cash must be deposited into the residual receipts fund within 90 days after the end of the prior year.
Effect or potential effect: At December 31, 2019, the residual receipts account is underfunded by $33,820.
Cause: The Corporation did not make the required deposit to the residual receipts fund.
Recommendation: As of December 31, 2019, the Property has positive surplus cash of $76,571, which includes the required deposits and unauthorized withdrawals not made as illustrated in the 2018 and 2017 audit reports. Management should deposit $76,571 to a segregated residual receipts account in the name of the Corporation.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and will fund the residual receipts account during 2024.
Finding reference number: 2019-003
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: M - Security deposits
Finding resolution status: In process
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $10,891
Statement of condition 2019-003: As of December 31, 2019, there was no segregated security deposit account and the liability of $10,891 was not properly funded.
Criteria: Pursuant to item 6(g) of the Regulatory Agreement, resident security deposits should be funded in a separate account in an amount not less than the amount of security deposits received from residents at all times.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement. Failure to fund security deposits could result in the inability of the Corporation to return security deposits to residents upon termination of the resident's lease.
Cause: Upon transition from prior management, a security deposit account was not established.
Recommendation: Management should fund the security deposit account and ensure that the liability is funded at all times.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and will fund the security deposit account in 2024.
Finding reference number: 2019-004
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: Z - Other
Finding resolution status: Resolved
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2019-004: For the year ended December 31, 2018, the Corporation did not submit Data Collection Form to FAC within the required time period.
Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to electronically submit Data Collection Form to FAC in accordance with HUD guidance.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement.
Cause: Due to administrative delays caused by the transition in management agents, the Corporation failed to submit Data Collection Form to FAC within the time period required.
Recommendation: The Corporation should submit Data Collection Form to FAC within the time period required.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and submitted the Data Collection Form to FAC. No further action is required.
Finding reference number: 2019-005
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: Z - Other
Finding resolution status: Resolved
Universe population size: 469 invoices
Sample size information: 25 invoices
Statistically valid sample: 1 invoices
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2019-005: At December 31, 2019, the management agent was unable to provide supporting invoices for 1 disbursement.
Criteria: Pursuant to paragraph 9(c) of the Regulatory Agreement, the mortgaged property, equipment, buildings, plans, offices, apparatus, devices, books, contracts, records, documents, and other papers relating thereto shall at all times be maintained in reasonable condition for proper audit. The books and records of the Corporation are required to be kept in accordance with HUD Financial Operations and Accounting Procedures for Insurance Handbook (4370.2) Chapter 2: Financial Operations and Accounting (Section 2-3 Maintenance of Books and Records), which requires the records to be complete and accurate.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement.
Cause: Due to the delay in requesting an audit be performed, invoices were placed into storage and were not able to be located.
Recommendation: Management should retain all invoices for disbursements in the future in order for its records to be complete and accurate.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation. Policies and procedures have been updated to make sure records are complete and accurate.
Finding reference number: 2019-001
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: Z - Other
Finding resolution status: Resolved
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2019-001: For the year ended December 31, 2019, the Corporation did not submit audited financial statements to HUD within the required time period.
Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to electronically submit audited financial statements to HUD in accordance with HUD guidance.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement.
Cause: Due to administrative delays caused by the transition in management agents, the Corporation failed to submit audited financial statements to HUD within the time period required.
Recommendation: The Corporation should submit audited financial statements to HUD within the time period required.
Reporting views of responsible officials: Management agrees with the recommendation and submitted the audited financial statements to HUD. No further action is required.
Finding reference number: 2019-002
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: B - Failure to make required residual receipt deposit
Finding resolution status: In process
Universe population size: One required deposit to the residual receipts account
Sample size information: One required deposit to the residual receipts account
Statistically valid sample: Yes
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $33,820
Statement of condition 2019-002: The Corporation did not make the required deposit to the residual receipts fund in the amount of $33,820.
Criteria: Pursuant to the Regulatory Agreement, PY surplus cash must be deposited into the residual receipts fund within 90 days after the end of the prior year.
Effect or potential effect: At December 31, 2019, the residual receipts account is underfunded by $33,820.
Cause: The Corporation did not make the required deposit to the residual receipts fund.
Recommendation: As of December 31, 2019, the Property has positive surplus cash of $76,571, which includes the required deposits and unauthorized withdrawals not made as illustrated in the 2018 and 2017 audit reports. Management should deposit $76,571 to a segregated residual receipts account in the name of the Corporation.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and will fund the residual receipts account during 2024.
Finding reference number: 2019-003
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: M - Security deposits
Finding resolution status: In process
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $10,891
Statement of condition 2019-003: As of December 31, 2019, there was no segregated security deposit account and the liability of $10,891 was not properly funded.
Criteria: Pursuant to item 6(g) of the Regulatory Agreement, resident security deposits should be funded in a separate account in an amount not less than the amount of security deposits received from residents at all times.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement. Failure to fund security deposits could result in the inability of the Corporation to return security deposits to residents upon termination of the resident's lease.
Cause: Upon transition from prior management, a security deposit account was not established.
Recommendation: Management should fund the security deposit account and ensure that the liability is funded at all times.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and will fund the security deposit account in 2024.
Finding reference number: 2019-004
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: Z - Other
Finding resolution status: Resolved
Universe population size: The universe population size is not applicable to the finding
Sample size information: The sample size information is not applicable to the finding
Statistically valid sample: N/A
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2019-004: For the year ended December 31, 2018, the Corporation did not submit Data Collection Form to FAC within the required time period.
Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to electronically submit Data Collection Form to FAC in accordance with HUD guidance.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement.
Cause: Due to administrative delays caused by the transition in management agents, the Corporation failed to submit Data Collection Form to FAC within the time period required.
Recommendation: The Corporation should submit Data Collection Form to FAC within the time period required.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation and submitted the Data Collection Form to FAC. No further action is required.
Finding reference number: 2019-005
Assistance Listing title and number (federal award identification and year): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects; Assistance Listing No. 14.155, for the year ended December 31, 2019.
Auditor non-compliance code: Z - Other
Finding resolution status: Resolved
Universe population size: 469 invoices
Sample size information: 25 invoices
Statistically valid sample: 1 invoices
Name of Federal Agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition 2019-005: At December 31, 2019, the management agent was unable to provide supporting invoices for 1 disbursement.
Criteria: Pursuant to paragraph 9(c) of the Regulatory Agreement, the mortgaged property, equipment, buildings, plans, offices, apparatus, devices, books, contracts, records, documents, and other papers relating thereto shall at all times be maintained in reasonable condition for proper audit. The books and records of the Corporation are required to be kept in accordance with HUD Financial Operations and Accounting Procedures for Insurance Handbook (4370.2) Chapter 2: Financial Operations and Accounting (Section 2-3 Maintenance of Books and Records), which requires the records to be complete and accurate.
Effect or potential effect: The Corporation is not in compliance with the Regulatory Agreement.
Cause: Due to the delay in requesting an audit be performed, invoices were placed into storage and were not able to be located.
Recommendation: Management should retain all invoices for disbursements in the future in order for its records to be complete and accurate.
Completion Date: 12/31/2024
Reporting views of responsible officials: Management agrees with the recommendation. Policies and procedures have been updated to make sure records are complete and accurate.