Audit 339874

2024-001 – Supportive Housing for Elderly Persons ALN 14.157 Statement of Condition: During the audit, we found the Project may not have adequate internal controls over tenant eligibility determination process process that at a minimum, would satisfactorily achieve federal statutory, regulatory, and Handbook requirements, including a lack of supervisory review of tenant certifications and a lack of documented staff training. Criteria: In accordance with HUD Handbook 4350.3, management agents of HUD-assisted properties are required to ensure all applicants meet eligibility criteria for income and other program requirements. Effective internal controls, including supervisory review, segregation of duties, and staff training are necessary to verify tenant eligibility accurately and ensure compliance with HUD regulations. Effect of Condition: Without adequate internal controls, there is a risk that ineligible tenants may receive assistance, which could lead to noncompliance with HUD regulations. Cause of Condition: The lack of internal controls was due to the absence of standard procedures for review of tenant certification and documentation of HUD-specific staff training. Recommendation: We recommend that management develop and implement formal policies and procedures for tenant eligibility determination to be consistent with HUD Handbook 4350.3, including steps for initial eligibility verification which would include a supervisory review process. We also recommend that staff attend HUD-specific training upon hire and then annually to ensure that adequate knowledge of HUD regulations is maintained. Documentation of this training, including certificates of completion, should be kept on file. Response: See Corrective Action Plan.

2024-002 – Supportive Housing for Elderly Persons ALN 14.182 Statement of Condition: During the audit, we noted that the Project failed to complete and submit recertifications within the required timeframe, leading to significant subsequent adjustments to project subsidy. Criteria: Per HUD Handbook 4350.3, management agents of HUD-assisted properties, are required to complete tenant recertifications annually. Recertifications must be completed within 12 months of the last certification and submitted timely to HUD’s Tenant Rental Assistance Certification System (TRACS). Effect of Condition: Late recertifications can lead to inaccurate tenant rent calculations and potential noncompliance with HUD requirements. Cause of Condition: The late recertifications were due to insufficient tracking and oversight of recertification deadlines by management. Recommendation: We recommend that management implement a formal process for tracking recertification deadlines, including regular reviews to ensure timely completion. Staff should receive additional training on HUD recertification requirements, and compliance monitoring procedures should be strengthened to prevent recurrence. Response: See Corrective Action Plan.

2024-001 – Supportive Housing for Elderly Persons ALN 14.157 Statement of Condition: During the audit, we found the Project may not have adequate internal controls over tenant eligibility determination process process that at a minimum, would satisfactorily achieve federal statutory, regulatory, and Handbook requirements, including a lack of supervisory review of tenant certifications and a lack of documented staff training. Criteria: In accordance with HUD Handbook 4350.3, management agents of HUD-assisted properties are required to ensure all applicants meet eligibility criteria for income and other program requirements. Effective internal controls, including supervisory review, segregation of duties, and staff training are necessary to verify tenant eligibility accurately and ensure compliance with HUD regulations. Effect of Condition: Without adequate internal controls, there is a risk that ineligible tenants may receive assistance, which could lead to noncompliance with HUD regulations. Cause of Condition: The lack of internal controls was due to the absence of standard procedures for review of tenant certification and documentation of HUD-specific staff training. Recommendation: We recommend that management develop and implement formal policies and procedures for tenant eligibility determination to be consistent with HUD Handbook 4350.3, including steps for initial eligibility verification which would include a supervisory review process. We also recommend that staff attend HUD-specific training upon hire and then annually to ensure that adequate knowledge of HUD regulations is maintained. Documentation of this training, including certificates of completion, should be kept on file. Response: See Corrective Action Plan.

2024-002 – Supportive Housing for Elderly Persons ALN 14.182 Statement of Condition: During the audit, we noted that the Project failed to complete and submit recertifications within the required timeframe, leading to significant subsequent adjustments to project subsidy. Criteria: Per HUD Handbook 4350.3, management agents of HUD-assisted properties, are required to complete tenant recertifications annually. Recertifications must be completed within 12 months of the last certification and submitted timely to HUD’s Tenant Rental Assistance Certification System (TRACS). Effect of Condition: Late recertifications can lead to inaccurate tenant rent calculations and potential noncompliance with HUD requirements. Cause of Condition: The late recertifications were due to insufficient tracking and oversight of recertification deadlines by management. Recommendation: We recommend that management implement a formal process for tracking recertification deadlines, including regular reviews to ensure timely completion. Staff should receive additional training on HUD recertification requirements, and compliance monitoring procedures should be strengthened to prevent recurrence. Response: See Corrective Action Plan.