Audit 33862

Finding No. 2022-001; Supportive Housing for the Elderly Section 202 Capital Advance (with "Project Rental Assistance Contract"), Assistance Listing 14.157 Criteria Residual receipts reserve deposits should be made within 90 days of year end. Condition During the year ended December 31, 2022, management did not make the required residual receipts reserve deposit in the amount of $12,564 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on June 30, 2022. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the Regulatory Agreement. Questioned Costs $12,564 Identification as a Repeat Finding Finding No. 2021-001 Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits Finding Resolution Status: Resolved Views of Responsible Officials Management has made the required residual receipts deposit based upon December 31, 2021, surplus cash in the amount of $12,564 on June 30, 2022.

Finding No. 2022-002; Supportive Housing for the Elderly Section 202 Capital Advance (with "Project Rental Assistance Contract"), Assistance Listing 14.157 Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition During the procedures applied to a sample of 7 tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding tenant eligibility and the maintenance of lease files. 1 out of 7 tenants tested did not have documentation in their lease file that their income was verified. Cause The project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs - None Identification as a Repeat Finding - None Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: Not Started or In Process Views of Responsible Officials All tenant income is verified at initial move in and at each annual and interim certification. The instance of noncompliance pertained to a tenant that only had social security income for her March 1, 2022 Annual Recertification, meaning that her verification would have been through the HUD EIV system and would not have been transmitted electronically to the auditors. Management believes the report was properly run. Additionally, our policies include running EIV master file reports on a monthly basis which would have alerted management to the presence of a new job or unreported income in the household had there been any.

Finding No. 2022-001; Supportive Housing for the Elderly Section 202 Capital Advance (with "Project Rental Assistance Contract"), Assistance Listing 14.157 Criteria Residual receipts reserve deposits should be made within 90 days of year end. Condition During the year ended December 31, 2022, management did not make the required residual receipts reserve deposit in the amount of $12,564 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on June 30, 2022. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the Regulatory Agreement. Questioned Costs $12,564 Identification as a Repeat Finding Finding No. 2021-001 Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits Finding Resolution Status: Resolved Views of Responsible Officials Management has made the required residual receipts deposit based upon December 31, 2021, surplus cash in the amount of $12,564 on June 30, 2022.

Finding No. 2022-002; Supportive Housing for the Elderly Section 202 Capital Advance (with "Project Rental Assistance Contract"), Assistance Listing 14.157 Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition During the procedures applied to a sample of 7 tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding tenant eligibility and the maintenance of lease files. 1 out of 7 tenants tested did not have documentation in their lease file that their income was verified. Cause The project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs - None Identification as a Repeat Finding - None Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: Not Started or In Process Views of Responsible Officials All tenant income is verified at initial move in and at each annual and interim certification. The instance of noncompliance pertained to a tenant that only had social security income for her March 1, 2022 Annual Recertification, meaning that her verification would have been through the HUD EIV system and would not have been transmitted electronically to the auditors. Management believes the report was properly run. Additionally, our policies include running EIV master file reports on a monthly basis which would have alerted management to the presence of a new job or unreported income in the household had there been any.