Audit 333757

Finding 2024-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Bishop Harrison Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end. Condition: The required deposit of $3,889 for the year ended March 31, 2023 was not made within the 60 day timeline. Context: We reviewed the residual receipts deposits during the year. Cause: Bishop Harrison Apartments’ surplus cash was not performed timely. Effect: Bishop Harrison Apartments was not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: Bishop Harrison Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: Bishop Harrison Apartments agrees with the finding and the required payment was made after the 60-day timeline.

Finding 2024-002: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Tenant files are required to contain signed copies of HUD-50059 acknowledging agreement with the rent calculation. In addition, documentation of the tenant’s age is required to support senior status. Condition: During our audit for 2024, we tested 5 tenant files. One HUD-50059 form was missing a tenant signature. In addition, one tenant’s file was missing documentation of the tenant’s age. Context: We reviewed 5 tenant files for the year. One was missing a tenant signature and one was missing documentation of the tenant’s age. Cause: Bishop Harrison Apartments has had significant turnover in the apartment manager position. Effect: Bishop Harrison Apartments was not in compliance with the HUD file requirements. Recommendation: We recommend that Bishop Harrison Apartments review tenant files to ensure all required signatures and documentation of age have been obtained. Views of Responsible Officials and Planned Corrective Actions: Bishop Harrison Apartments agrees with the finding and the auditor’s recommendations have been adopted. Bishop Harrison Apartments replaced the apartment manager after year-end and has reviewed all files to ensure appropriate documentation and calculations.

Finding 2024-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Bishop Harrison Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end. Condition: The required deposit of $3,889 for the year ended March 31, 2023 was not made within the 60 day timeline. Context: We reviewed the residual receipts deposits during the year. Cause: Bishop Harrison Apartments’ surplus cash was not performed timely. Effect: Bishop Harrison Apartments was not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: Bishop Harrison Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: Bishop Harrison Apartments agrees with the finding and the required payment was made after the 60-day timeline.

Finding 2024-002: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Tenant files are required to contain signed copies of HUD-50059 acknowledging agreement with the rent calculation. In addition, documentation of the tenant’s age is required to support senior status. Condition: During our audit for 2024, we tested 5 tenant files. One HUD-50059 form was missing a tenant signature. In addition, one tenant’s file was missing documentation of the tenant’s age. Context: We reviewed 5 tenant files for the year. One was missing a tenant signature and one was missing documentation of the tenant’s age. Cause: Bishop Harrison Apartments has had significant turnover in the apartment manager position. Effect: Bishop Harrison Apartments was not in compliance with the HUD file requirements. Recommendation: We recommend that Bishop Harrison Apartments review tenant files to ensure all required signatures and documentation of age have been obtained. Views of Responsible Officials and Planned Corrective Actions: Bishop Harrison Apartments agrees with the finding and the auditor’s recommendations have been adopted. Bishop Harrison Apartments replaced the apartment manager after year-end and has reviewed all files to ensure appropriate documentation and calculations.