Audit 318538

FY End

2023-12-31

Total Expended

$6.36M

Findings

2

Programs

1

Organization: Andrew Kim House, Inc. (MD)

Year: 2023 Accepted: 2024-09-04

Auditor: Cohnreznick LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
485718	2023-001	Significant Deficiency	-	E
1062160	2023-001	Significant Deficiency	-	E

ALN	Program	Spent	Major	Findings
14.157	Supportive Housing for the Elderly	$6.36M	Yes	1

Contacts

Name	Title	Type
URNHCBT3NNV7	Sarah O'Rielly	Auditee
3014936000	Russell Phillips	Auditor
No contacts on file

Notes to SEFA

Title: U.S. Department of Housing and Urban Development Capital Advance program Accounting Policies: The accompanying schedule of expenditures of federal awards ("Schedule") includes the federal award activity of Andrew Kim House, Inc., HUD Project No.: 000-EE052-WAH, under programs of the federal government for the year ended December 31, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Andrew Kim House, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Andrew Kim House, Inc. For the year ended December 31, 2023, no awards were passed through to subrecipients. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Andrew Kim House, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The balance shown on the Schedule of expenditures of federal awards relating to the capital advance consists of $5,643,700 expended in prior years. Section 202 capital advances need not be repaid as long as the owner continues to make the housing available to the low-income elderly for at least 40 years.

Finding Details

Finding 2023-001

Criteria - Eligibility Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review we noted the following deficiencies: 2 out of 9 tenants tested did not have the accurate amount of adjusted annual income reported on HUD Form 50059. 1 out of 9 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. Cause Management's policies with respect to the determination of tenant eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Context The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials Management agrees with the finding, Each resident’s information is processed before moving in to ensure they don’t have tenancy elsewhere. Going forward, we will ensure that EIV data is ran within 90 days. We have checklists that the property manager follows when processing a tenant and the regional manager has gone over it and made some modifications. Going forward, management will ensure that the EIV system is utilized correctly, and that accurate amount of adjusted annual income is reported on the HUD Form 50059.

Finding 2023-001

Criteria - Eligibility Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review we noted the following deficiencies: 2 out of 9 tenants tested did not have the accurate amount of adjusted annual income reported on HUD Form 50059. 1 out of 9 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. Cause Management's policies with respect to the determination of tenant eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Context The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials Management agrees with the finding, Each resident’s information is processed before moving in to ensure they don’t have tenancy elsewhere. Going forward, we will ensure that EIV data is ran within 90 days. We have checklists that the property manager follows when processing a tenant and the regional manager has gone over it and made some modifications. Going forward, management will ensure that the EIV system is utilized correctly, and that accurate amount of adjusted annual income is reported on the HUD Form 50059.