Audit 32670

Finding Number: 2022-1 Catalog Number Program Name CFDA#14.195 Section 8 Housing Assistance Payments Program Special Allocations Category Compliance Compliance requirement Cash management Statement of Condition For 6 of 25 disbursement tested we noted that the check was issued 30 days after the date of the invoice. Context In order to ascertain whether the Project complied with the cash management compliance requirement we selected 25 disbursements and verified the time elapsing between the invoice and the check and noted that for 6 of 25 disbursements the time exceeded 30 days, average period as per client established procedures. Criteria The 2 CFR Section 215.22 states that payment methods of Non-Profit Organizations shall minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients. Known questioned cost None. Underlying cause The Project has not established proper internal control procedures for cash management. In addition, the Project takes more than 30 days in processing its accounts payable invoices Effect Project may be subject to HUD findings and therefore, may be subject to penalties. Recommendation We recommend the Project?s management to establish specific internal control procedures to minimize the time to pay suppliers invoices and therefore, minimize the cash in bank. We recommend also, establishing monitoring procedures to ensure the compliance of such requirement. Management Response See Corrective Action Plan.

Federal Award Findings 2022-2 ? (continued) Catalog Number Program Name CFDA#14.181 Supportive Housing for Persons with Disabilities Category Compliance Compliance requirement Special Test Statement of Condition The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control reinspection?s. The PHA must prepared a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). To make sura that the units meet with the HQS requirements. We review 5 tenants files and they did not got inspected during 2022. Context At least annually, it is the responsibility of the PHA to conduct inspections of units to determine compliance with HQS prior to the execution of the entire term of the assisted lease. Inspections may be completed by PHA staff or by contract personnel. Criteria According to section 811 the owner is responsible for annually reexamining the units and make sure that the appropriates adjustments and the apartments are taking care of. Known questioned cost None. Underlying cause PHAs should strive to ensure consistency among staff in areas requiring judgment. Not all areas of HQS are exactly defined while acceptability criteria specifically state the minimum standards necessary to meet HQS, inspector judgment or tenant preference may also need to be considered in determining whether the unit meets minimum standards or desirable. Staff can receive the tools to make sound decisions through training, access to written policy and procedures, and consistent written and oral instruction. Effect Project may be subject to HUD findings and therefore, may be subject to penalties. Recommendation We recommend the Project?s management to establish specific internal control procedures to maintain an annual inspection of all the apartments. Management Response See Corrective Action Plan.

Finding Number: 2022-1 Catalog Number Program Name CFDA#14.195 Section 8 Housing Assistance Payments Program Special Allocations Category Compliance Compliance requirement Cash management Statement of Condition For 6 of 25 disbursement tested we noted that the check was issued 30 days after the date of the invoice. Context In order to ascertain whether the Project complied with the cash management compliance requirement we selected 25 disbursements and verified the time elapsing between the invoice and the check and noted that for 6 of 25 disbursements the time exceeded 30 days, average period as per client established procedures. Criteria The 2 CFR Section 215.22 states that payment methods of Non-Profit Organizations shall minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients. Known questioned cost None. Underlying cause The Project has not established proper internal control procedures for cash management. In addition, the Project takes more than 30 days in processing its accounts payable invoices Effect Project may be subject to HUD findings and therefore, may be subject to penalties. Recommendation We recommend the Project?s management to establish specific internal control procedures to minimize the time to pay suppliers invoices and therefore, minimize the cash in bank. We recommend also, establishing monitoring procedures to ensure the compliance of such requirement. Management Response See Corrective Action Plan.

Federal Award Findings 2022-2 ? (continued) Catalog Number Program Name CFDA#14.181 Supportive Housing for Persons with Disabilities Category Compliance Compliance requirement Special Test Statement of Condition The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control reinspection?s. The PHA must prepared a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). To make sura that the units meet with the HQS requirements. We review 5 tenants files and they did not got inspected during 2022. Context At least annually, it is the responsibility of the PHA to conduct inspections of units to determine compliance with HQS prior to the execution of the entire term of the assisted lease. Inspections may be completed by PHA staff or by contract personnel. Criteria According to section 811 the owner is responsible for annually reexamining the units and make sure that the appropriates adjustments and the apartments are taking care of. Known questioned cost None. Underlying cause PHAs should strive to ensure consistency among staff in areas requiring judgment. Not all areas of HQS are exactly defined while acceptability criteria specifically state the minimum standards necessary to meet HQS, inspector judgment or tenant preference may also need to be considered in determining whether the unit meets minimum standards or desirable. Staff can receive the tools to make sound decisions through training, access to written policy and procedures, and consistent written and oral instruction. Effect Project may be subject to HUD findings and therefore, may be subject to penalties. Recommendation We recommend the Project?s management to establish specific internal control procedures to maintain an annual inspection of all the apartments. Management Response See Corrective Action Plan.