Audit 340840

2024-002 – Eligibility Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility) Federal program U.S. Department of Housing and Urban Development · Section 8 Housing Assistance Payments (ALN# 14.195) Criteria. Under Section 8 of the National Housing Act of 1959, project management is required to ensure that during a fiscal year at least 40% of the units that become available, together with initial certifications of in-place tenants, serve extremely low-income families. If the Project has actively marketed available units to extremely low-income families and has been unable to achieve the 40% target for admissions and initial certifications, the Project is permitted to rent to other eligible families after a reasonable marketing period has expired. Condition. Less than 40% of tenants who moved into the property during the year met the extremely-low income threshold and management did not maintain records of marketing efforts targeted to extremely low-income families, demonstrating that reasonable efforts were made to fill available units accordingly and that such efforts are ongoing. Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements. Effect. As a result of this condition, the Project failed to meet the prescribed income targeting requirements and documentation of marketing efforts to reach the target population. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management revisit their current policies and procedures surrounding tenant acceptance and marketing efforts to ensure compliance with HUD policies. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

2024-002 – Eligibility Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility) Federal program U.S. Department of Housing and Urban Development · Section 8 Housing Assistance Payments (ALN# 14.195) Criteria. Under Section 8 of the National Housing Act of 1959, project management is required to ensure that during a fiscal year at least 40% of the units that become available, together with initial certifications of in-place tenants, serve extremely low-income families. If the Project has actively marketed available units to extremely low-income families and has been unable to achieve the 40% target for admissions and initial certifications, the Project is permitted to rent to other eligible families after a reasonable marketing period has expired. Condition. Less than 40% of tenants who moved into the property during the year met the extremely-low income threshold and management did not maintain records of marketing efforts targeted to extremely low-income families, demonstrating that reasonable efforts were made to fill available units accordingly and that such efforts are ongoing. Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements. Effect. As a result of this condition, the Project failed to meet the prescribed income targeting requirements and documentation of marketing efforts to reach the target population. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management revisit their current policies and procedures surrounding tenant acceptance and marketing efforts to ensure compliance with HUD policies. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.