2024-001 – Eligibility - Tenant File Documentation
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments of applying residents, and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of six tenant files, we noted:
1) One out of six instances where an EIV was not run for a tenant file within 90 days of move in;
2) One out of six instances where a refund was not disbursed to a tenant within 60 days of move-out;
3) Two out of six instances where the incorrect checking account balance was used in the verification of tenant assets.
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, employees did not follow HUD guideline procedures, and/or did not properly calculate the tenant subsidy in HUD Form 50059. While there were no significant differences in the amount of subsidies allowed compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance.
Questioned Costs. No costs are required to be questioned as a result of this finding, in as much as no unallowable expenditures were noted.
Recommendation. We recommend that management should strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure all proper HUD guideline procedures are followed, and tenant subsidies are appropriately calculated.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-001 – Eligibility - Tenant File Documentation
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments of applying residents, and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of six tenant files, we noted:
1) One out of six instances where an EIV was not run for a tenant file within 90 days of move in;
2) One out of six instances where a refund was not disbursed to a tenant within 60 days of move-out;
3) Two out of six instances where the incorrect checking account balance was used in the verification of tenant assets.
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, employees did not follow HUD guideline procedures, and/or did not properly calculate the tenant subsidy in HUD Form 50059. While there were no significant differences in the amount of subsidies allowed compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance.
Questioned Costs. No costs are required to be questioned as a result of this finding, in as much as no unallowable expenditures were noted.
Recommendation. We recommend that management should strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure all proper HUD guideline procedures are followed, and tenant subsidies are appropriately calculated.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-002 – Allowable Costs/Cost Principles – Competitive Bid Support
Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Allowable Costs / Cost Principles)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for approving, correctly classifying, and determining allowability of costs prior to disbursement.
Condition. Out of 40 disbursement selections, we noted 1 instance where competitive price quotes were not maintained as dictated by the Procurement Policy.
Cause. Management has not properly implemented internal control procedures to ensure that, when necessary per policy, competitive price checks have been obtained and properly documented.
Effect. As a result of this condition, the Project is not able to support that they secured favorable pricing terms as per the Procurement Policy.
Questioned Costs. The total amount of the disbursement where competitive price quotes were not maintained was $41,104.
Recommendation. We recommend that management properly follow existing procedures and controls in place to ensure all purchase support and approval documentation is obtained and retained.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-002 – Allowable Costs/Cost Principles – Competitive Bid Support
Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Allowable Costs / Cost Principles)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for approving, correctly classifying, and determining allowability of costs prior to disbursement.
Condition. Out of 40 disbursement selections, we noted 1 instance where competitive price quotes were not maintained as dictated by the Procurement Policy.
Cause. Management has not properly implemented internal control procedures to ensure that, when necessary per policy, competitive price checks have been obtained and properly documented.
Effect. As a result of this condition, the Project is not able to support that they secured favorable pricing terms as per the Procurement Policy.
Questioned Costs. The total amount of the disbursement where competitive price quotes were not maintained was $41,104.
Recommendation. We recommend that management properly follow existing procedures and controls in place to ensure all purchase support and approval documentation is obtained and retained.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-001 – Eligibility - Tenant File Documentation
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments of applying residents, and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of six tenant files, we noted:
1) One out of six instances where an EIV was not run for a tenant file within 90 days of move in;
2) One out of six instances where a refund was not disbursed to a tenant within 60 days of move-out;
3) Two out of six instances where the incorrect checking account balance was used in the verification of tenant assets.
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, employees did not follow HUD guideline procedures, and/or did not properly calculate the tenant subsidy in HUD Form 50059. While there were no significant differences in the amount of subsidies allowed compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance.
Questioned Costs. No costs are required to be questioned as a result of this finding, in as much as no unallowable expenditures were noted.
Recommendation. We recommend that management should strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure all proper HUD guideline procedures are followed, and tenant subsidies are appropriately calculated.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-001 – Eligibility - Tenant File Documentation
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments of applying residents, and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of six tenant files, we noted:
1) One out of six instances where an EIV was not run for a tenant file within 90 days of move in;
2) One out of six instances where a refund was not disbursed to a tenant within 60 days of move-out;
3) Two out of six instances where the incorrect checking account balance was used in the verification of tenant assets.
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, employees did not follow HUD guideline procedures, and/or did not properly calculate the tenant subsidy in HUD Form 50059. While there were no significant differences in the amount of subsidies allowed compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance.
Questioned Costs. No costs are required to be questioned as a result of this finding, in as much as no unallowable expenditures were noted.
Recommendation. We recommend that management should strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure all proper HUD guideline procedures are followed, and tenant subsidies are appropriately calculated.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-002 – Allowable Costs/Cost Principles – Competitive Bid Support
Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Allowable Costs / Cost Principles)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for approving, correctly classifying, and determining allowability of costs prior to disbursement.
Condition. Out of 40 disbursement selections, we noted 1 instance where competitive price quotes were not maintained as dictated by the Procurement Policy.
Cause. Management has not properly implemented internal control procedures to ensure that, when necessary per policy, competitive price checks have been obtained and properly documented.
Effect. As a result of this condition, the Project is not able to support that they secured favorable pricing terms as per the Procurement Policy.
Questioned Costs. The total amount of the disbursement where competitive price quotes were not maintained was $41,104.
Recommendation. We recommend that management properly follow existing procedures and controls in place to ensure all purchase support and approval documentation is obtained and retained.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.
2024-002 – Allowable Costs/Cost Principles – Competitive Bid Support
Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Allowable Costs / Cost Principles)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for approving, correctly classifying, and determining allowability of costs prior to disbursement.
Condition. Out of 40 disbursement selections, we noted 1 instance where competitive price quotes were not maintained as dictated by the Procurement Policy.
Cause. Management has not properly implemented internal control procedures to ensure that, when necessary per policy, competitive price checks have been obtained and properly documented.
Effect. As a result of this condition, the Project is not able to support that they secured favorable pricing terms as per the Procurement Policy.
Questioned Costs. The total amount of the disbursement where competitive price quotes were not maintained was $41,104.
Recommendation. We recommend that management properly follow existing procedures and controls in place to ensure all purchase support and approval documentation is obtained and retained.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.