Criteria
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:
- 1 out of 1 lease files for new tenants did not follow EIV guidelines, no EIV report was generated
for move-in certification.
- 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV report was not
generated for recertification for one tenant and for the second tenant the report was generated
outside of the allowed 120-day period.
- 2 out of 6 lease files for existing tenants did not contain necessary documentation, both files
were missing gross rent change forms and latest executed versions of HUD-50059 form, one file
was also missing support for medical expenses presented on corrected HUD-50059 form.
- 1 out of 6 lease files for existing tenants did not contain necessary documentation to support
medical deductions.
- 1 out of 1 lease files for former tenants had security deposit refund that exceeded 30-day post
move-out window.
Cause
Management's policies with respect to the determination of 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 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.
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
View of Responsible Officials
Management agrees with the finding. Managements Plan of Action for Non-Compliance of the
HUD Guidelines includes the immediate steps below:
Provide additional training and resources to ensure that the staff has a clear understanding of
HUD requirements that will include the importance of adhering to procedures and guidelines
with a specific focus on the EIV requirements and reporting, along with the timely processing
of annual recertifications.
Implement increased monitoring and oversight mechanisms to detect and correct compliance
issues.
Establish clear accountability measures for not following procedures through appropriate
corrective actions.
Effectively communicate the importance of following procedures to all staff, emphasizing the
impact on organizational efficiency and compliance.
Encourage a culture of continuous improvement where procedures are regularly reviewed,
communicated with the staff and provide regular training of changing circumstances or best
practices.
Finding Resolution Status: Resolved
Criteria
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:
- 1 out of 1 lease files for new tenants did not follow EIV guidelines, no EIV report was generated
for move-in certification.
- 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV report was not
generated for recertification for one tenant and for the second tenant the report was generated
outside of the allowed 120-day period.
- 2 out of 6 lease files for existing tenants did not contain necessary documentation, both files
were missing gross rent change forms and latest executed versions of HUD-50059 form, one file
was also missing support for medical expenses presented on corrected HUD-50059 form.
- 1 out of 6 lease files for existing tenants did not contain necessary documentation to support
medical deductions.
- 1 out of 1 lease files for former tenants had security deposit refund that exceeded 30-day post
move-out window.
Cause
Management's policies with respect to the determination of 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 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.
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
View of Responsible Officials
Management agrees with the finding. Managements Plan of Action for Non-Compliance of the
HUD Guidelines includes the immediate steps below:
Provide additional training and resources to ensure that the staff has a clear understanding of
HUD requirements that will include the importance of adhering to procedures and guidelines
with a specific focus on the EIV requirements and reporting, along with the timely processing
of annual recertifications.
Implement increased monitoring and oversight mechanisms to detect and correct compliance
issues.
Establish clear accountability measures for not following procedures through appropriate
corrective actions.
Effectively communicate the importance of following procedures to all staff, emphasizing the
impact on organizational efficiency and compliance.
Encourage a culture of continuous improvement where procedures are regularly reviewed,
communicated with the staff and provide regular training of changing circumstances or best
practices.
Finding Resolution Status: Resolved
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and recorded
in order for the financial statements to be fairly presented in accordance with generally
accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement
of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial
statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted in
the United States of America. Condition 2 results in auditee being designated as not a low-risk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed timely.
Auditor Noncompliance Code
S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and recorded
in order for the financial statements to be fairly presented in accordance with generally
accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement
of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial
statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted in
the United States of America. Condition 2 results in auditee being designated as not a low-risk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed timely.
Auditor Noncompliance Code
S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved
Criteria
During the year ended June 30, 2024, the Project paid management fees of $13,346 in excess of
the amount approved by HUD.
Condition
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Cause
There were 2 different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
The payments of $13,346 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
The management company should reimburse the Project for overpaid management fee in the
amount of $13,346 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code
J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: Unresolved
Criteria
During the year ended June 30, 2024, the Project paid management fees of $13,346 in excess of
the amount approved by HUD.
Condition
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Cause
There were 2 different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
The payments of $13,346 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
The management company should reimburse the Project for overpaid management fee in the
amount of $13,346 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code
J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: Unresolved
Criteria
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:
- 1 out of 1 lease files for new tenants did not follow EIV guidelines, no EIV report was generated
for move-in certification.
- 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV report was not
generated for recertification for one tenant and for the second tenant the report was generated
outside of the allowed 120-day period.
- 2 out of 6 lease files for existing tenants did not contain necessary documentation, both files
were missing gross rent change forms and latest executed versions of HUD-50059 form, one file
was also missing support for medical expenses presented on corrected HUD-50059 form.
- 1 out of 6 lease files for existing tenants did not contain necessary documentation to support
medical deductions.
- 1 out of 1 lease files for former tenants had security deposit refund that exceeded 30-day post
move-out window.
Cause
Management's policies with respect to the determination of 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 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.
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
View of Responsible Officials
Management agrees with the finding. Managements Plan of Action for Non-Compliance of the
HUD Guidelines includes the immediate steps below:
Provide additional training and resources to ensure that the staff has a clear understanding of
HUD requirements that will include the importance of adhering to procedures and guidelines
with a specific focus on the EIV requirements and reporting, along with the timely processing
of annual recertifications.
Implement increased monitoring and oversight mechanisms to detect and correct compliance
issues.
Establish clear accountability measures for not following procedures through appropriate
corrective actions.
Effectively communicate the importance of following procedures to all staff, emphasizing the
impact on organizational efficiency and compliance.
Encourage a culture of continuous improvement where procedures are regularly reviewed,
communicated with the staff and provide regular training of changing circumstances or best
practices.
Finding Resolution Status: Resolved
Criteria
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:
- 1 out of 1 lease files for new tenants did not follow EIV guidelines, no EIV report was generated
for move-in certification.
- 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV report was not
generated for recertification for one tenant and for the second tenant the report was generated
outside of the allowed 120-day period.
- 2 out of 6 lease files for existing tenants did not contain necessary documentation, both files
were missing gross rent change forms and latest executed versions of HUD-50059 form, one file
was also missing support for medical expenses presented on corrected HUD-50059 form.
- 1 out of 6 lease files for existing tenants did not contain necessary documentation to support
medical deductions.
- 1 out of 1 lease files for former tenants had security deposit refund that exceeded 30-day post
move-out window.
Cause
Management's policies with respect to the determination of 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 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.
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
View of Responsible Officials
Management agrees with the finding. Managements Plan of Action for Non-Compliance of the
HUD Guidelines includes the immediate steps below:
Provide additional training and resources to ensure that the staff has a clear understanding of
HUD requirements that will include the importance of adhering to procedures and guidelines
with a specific focus on the EIV requirements and reporting, along with the timely processing
of annual recertifications.
Implement increased monitoring and oversight mechanisms to detect and correct compliance
issues.
Establish clear accountability measures for not following procedures through appropriate
corrective actions.
Effectively communicate the importance of following procedures to all staff, emphasizing the
impact on organizational efficiency and compliance.
Encourage a culture of continuous improvement where procedures are regularly reviewed,
communicated with the staff and provide regular training of changing circumstances or best
practices.
Finding Resolution Status: Resolved
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and recorded
in order for the financial statements to be fairly presented in accordance with generally
accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement
of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial
statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted in
the United States of America. Condition 2 results in auditee being designated as not a low-risk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed timely.
Auditor Noncompliance Code
S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved
1. Management is responsible for the design, implementation, and maintenance of internal
controls relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error.
2. Management is responsible for timely submission of audited financial statements to Federal
Audit Clearinghouse ("FAC").
Condition
1. The accounting records required numerous material adjustments to be proposed and recorded
in order for the financial statements to be fairly presented in accordance with generally
accepted accounting principles in the United States of America.
2. Single Audit reports are required to be submitted to the FAC pursuant to the audit requirement
of Title 2 U.S. Code of Federal Regulations Part 200. Submission of June 30, 2023 financial
statements was not completed within specified time frame.
Cause
Management did not have sufficient controls over financial reporting.
Effect or Potential Effect
Condition 1 may lead to inaccurate financial reporting and potential misstatement of the financial
statements such that they are not in accordance with accounting principles generally accepted in
the United States of America. Condition 2 results in auditee being designated as not a low-risk
auditee, which may have an effect on future federal grants and program eligibility.
Recommendation
1. Management should undertake a review of internal controls over financial reporting and
ensure that financial data is properly recorded in the books and records of the Project to
prevent misstatements from occurring in the future.
2. Management should implement procedures to ensure that required filing is completed timely.
Auditor Noncompliance Code
S. Internal control deficiencies
Views of Responsible Officials
1. Management agrees with the finding and recommendation and has implemented reviews of
the financial statements by senior management prior to closing books to ensure accuracy of
information.
2. Management agrees with the finding and recommendation and will ensure required filing is
completed timely.
Finding Resolution Status: Resolved
Criteria
During the year ended June 30, 2024, the Project paid management fees of $13,346 in excess of
the amount approved by HUD.
Condition
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Cause
There were 2 different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
The payments of $13,346 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
The management company should reimburse the Project for overpaid management fee in the
amount of $13,346 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code
J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: Unresolved
Criteria
During the year ended June 30, 2024, the Project paid management fees of $13,346 in excess of
the amount approved by HUD.
Condition
Management fee payments are limited to amounts determined in accordance with the terms of
the HUD approved management agreement.
Cause
There were 2 different management agreements and management did not follow the HUD
approved management agreement when paying management fees from operations.
Effect or Potential Effect
The overpaid amount is an unauthorized distribution and therefore considered to be questioned
costs.
Questioned Costs
The payments of $13,346 were unauthorized loans and therefore considered to be questioned
costs.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
The management company should reimburse the Project for overpaid management fee in the
amount of $13,346 and implement procedures to ensure that the management fee paid does not
exceed the amount determined in accordance with the HUD approved management agreement.
Auditor Noncompliance Code
J. Unauthorized management fees
Views of Responsible Officials
Management agrees with the finding and is working with ownership on reimbursements to the
property. Management will collect in accordance with HUD going forward.
Finding Resolution Status: Unresolved