FAC Explorer

Audit 341741

FY End
2024-06-30
Total Expended
$1.42M
Findings
6
Programs
1
Organization: Morning Calm Apt (WA)
Year: 2024 Accepted: 2025-02-09
Auditor: Squires Maddux & Company PLLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
522477 2024-002 - Yes N
522478 2024-003 - Yes N
522479 2024-004 Significant Deficiency Yes E
1098919 2024-002 - Yes N
1098920 2024-003 - Yes N
1098921 2024-004 Significant Deficiency Yes E

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $98,967 Yes 0

Contacts

Name Title Type
VA5DLTMDADG4 Susan Meyers Auditee
2064418866 John Maddux Auditor
No contacts on file

Notes to SEFA

Title: NOTE A – BASIS OF PRESENTATION Accounting Policies: NOTE A – BASIS OF PRESENTATION The preceding schedule of expenditures of federal awards includes the federal grant activity of Morning Calm Apt (formerly Morning Calm, Inc.), HUD Project No. 127-EE017 and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Morning Calm Apt (formerly Morning Calm, Inc.), it is not intended to and does not present the financial position, change in net assets, or cash flows of Morning Calm Apt. NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance. The preceding schedule of expenditures of federal awards includes the federal grant activity of Morning Calm Apt (formerly Morning Calm, Inc.), HUD Project No. 127-EE017 and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Morning Calm Apt (formerly Morning Calm, Inc.), it is not intended to and does not present the financial position, change in net assets, or cash flows of Morning Calm Apt.
Title: NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: NOTE A – BASIS OF PRESENTATION The preceding schedule of expenditures of federal awards includes the federal grant activity of Morning Calm Apt (formerly Morning Calm, Inc.), HUD Project No. 127-EE017 and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Morning Calm Apt (formerly Morning Calm, Inc.), it is not intended to and does not present the financial position, change in net assets, or cash flows of Morning Calm Apt. NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE C – U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT LOAN PROGRAMS Accounting Policies: NOTE A – BASIS OF PRESENTATION The preceding schedule of expenditures of federal awards includes the federal grant activity of Morning Calm Apt (formerly Morning Calm, Inc.), HUD Project No. 127-EE017 and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); the financial statements have been prepared and presented based upon accounting principles generally accepted in the United States of America (US GAAP); therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. Because the Schedule presents only a selected portion of the operations of Morning Calm Apt (formerly Morning Calm, Inc.), it is not intended to and does not present the financial position, change in net assets, or cash flows of Morning Calm Apt. NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Morning Calm Apt has elected not to use the ten percent (10%) de Minimis indirect cost rate allowed under the Uniform Guidance. Morning Calm Apt has received a U.S. Department of Housing and Urban Development capital advance pursuant to Section 202, of the National Housing Act. The capital advance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. Morning Calm Apt received no additional capital advance proceeds during the year. The balance of the capital advance outstanding at June 30, 2024 consisted of: 14.157 Supportive Housing for the Elderly loan $1,325,200.

Finding Details

Finding 2024-002
FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT S3800-010 Finding Reference Number: 2024-002 S3800-011 Title and Assistance Number of Federal Program: 14.157 Supportive Housing for the Elderly S3800-015 Type of Finding: Federal Program Finding (FP) S3800-016 Finding Resolution Status: IN PROCESS S3800-017 Information on Universe Population Size: N/A - Not detected as a result of sampling procedures and testing. S3800-018 Sample Size Information: N/A - Not detected as a result of sampling procedures and testing. S3800-019 Identification of Repeat Finding and Finding Reference Number: 2023-002 S3800-020 Criteria: The HUD regulatory agreement requires monthly deposits to the replacement reserve account of $1,351. S3800-030 Statement of Condition: Management only made nine (9) of the twelve (12) monthly required reserve deposits, leaving the account underfunded by $4,053 at June 30, 2022; for the year ended June 30, 2023, only $2,702 of the required $16,212 in deposits were made, leaving the account behind schedule by another $13,510, for a total deficiency of $17,563; for the year ended June 30, 2024, only $5,404 of the required $16,212 in deposits were made, leaving the account behind schedule by another $10,808, for a total cumulative deficiency of $28,371. S3800-032 Cause: Management has properly designed controls to ensure all monthly deposits are made; however, the control is not functioning as intended, and the project has recently been experiencing liquidity problems. S3800-033 Effect or Potential Effect: The replacement reserve account is underfunded by $28,371. S3800-035 Auditor Non-Compliance Code: N – Reserve for Replacements Deposits S3800-040 Questioned Costs: $28,371 Details – Questioned Costs by Property S3800-037 FHA/Contract Number: 127-EE017 S3800-038 Questioned Costs: $28,371 S3800-045 Reporting Views of Responsible Officials: As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required reserve deposits and pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan pay all vendors for amounts owed and fund the reserve account. A rent increase may be necessary. S3800-050 Context: See statement of condition. S3800-080 Recommendation: Management should institute a monitoring process to ensure all required monthly deposits to the replacement reserve are made. Such processes could include initiating automatic recurring monthly transfers with the financial institution that maintains the replacement reserve account. We also recommend contacting the HUD project manager to develop a plan to pay all outstanding liabilities and fund the reserve account. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required reserve deposits and pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the reserve account. A rent increase may be necessary. S3800-0130 Response Indicator: Agree (A) S3800-0140 Completion Date: February 3, 2025 S3800-0150 Response: As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required reserve deposits and pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan pay all vendors for amounts owed and fund the reserve account. A rent increase may be necessary.
Finding 2024-003
FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT S3800-010 Finding Reference Number: 2024-003 S3800-011 Title and Assistance Number of Federal Program: 14.157 Supportive Housing for the Elderly S3800-015 Type of Finding: Federal Program Finding (FP) S3800-016 Finding Resolution Status: IN PROCESS S3800-017 Information on Universe Population Size: N/A - Not detected as a result of sampling procedures and testing. S3800-018 Sample Size Information: N/A - Not detected as a result of sampling procedures and testing. S3800-019 Identification of Repeat Finding and Finding Reference Number: 2023-003 S3800-020 Criteria: The HUD regulatory agreement requires pre-approval for all withdrawals from the residual receipts account. S3800-030 Statement of Condition: Management made an unauthorized withdrawal of $4,400 from the residual receipts account during the fiscal year ended June 30, 2022; the funds have not been returned to the residual receipts account. S3800-032 Cause: Management mistakenly withdrew funds from the residual receipts account during the year ended June 30, 2022 but did not make a deposit to replace those funds during the fiscal years ended June 30, 2023 or June 30, 2024. S3800-033 Effect or Potential Effect: The residual receipts account remains underfunded by $4,400. S3800-035 Auditor Non-Compliance Code: C – Unauthorized withdrawals from residual receipts account S3800-040 Questioned Costs: $4,400 Details – Questioned Costs by Property S3800-037 FHA/Contract Number: 127-EE017 S3800-038 Questioned Costs: $4,400 S3800-045 Reporting Views of Responsible Officials: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings prior to the discovery of the unrecorded expenses. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent such future occurrences. As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required residual receipts reserve deposit or pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary. S3800-050 Context: Management made an unauthorized withdrawal of $4,400 from the residual receipts account during the fiscal year ended June 30, 2022; the funds have not been returned to the residual receipts account leaving the account underfunded by $4,400. S3800-080 Recommendation: Management should deposit $4,400 into the residual receipts account to refund the unapproved withdrawals. Management should also contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent such future occurrences. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary. S3800-0130 Response Indicator: Agree (A) S3800-0140 Completion Date: February 3, 2025 S3800-0150 Response: The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent such future occurrences. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary.
Finding 2024-004
FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT S3800-010 Finding Reference Number: 2024-004 S3800-011 Title and Assistance Number of Federal Program: 14.157 Supportive Housing for the Elderly S3800-015 Type of Finding: Federal Award Finding S3800-016 Finding Resolution Status: In Process S3800-017 Information on Universe Population Size: 19 rental units S3800-018 Sample Size Information: 6 rental units S3800-019 Identification of Repeat Finding and Finding Reference Number: Not Applicable. S3800-020 Criteria: The Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework is a widely recognized framework for designing, implementing, and evaluating internal control systems. The COSO framework defines internal control as a process that is designed to provide reasonable assurance with respect to achievement of objectives of compliance with applicable laws and regulations. The COSO framework offers useful guiding principles that can be applied in establishing and operating an effective regulatory compliance program with the goal of closing compliance gaps, and ensuring the prevention of material noncompliance. The monitoring component of the COSO framework involves periodic or ongoing evaluations to verify that each of the five components internal control, including the controls that affect the principles within each component, are present and functioning. Monitoring helps ensure that internal controls continue to operate effectively. S3800-030 Statement of Condition: Management had developed activity level controls over compliance that included compliance review of all tenant certifications including income verifications used in determining the amount of rent amounts due from eligible PRAC 202 participants (tenants) by the management firm compliance department. However, during our testing it was discovered that the files were missing documentation of varying importance which if properly reviewed, should have been identified as missing; some files were missing evidence of file review. S3800-032 Cause: Management had properly designed activity level controls over compliance, but those controls were not functioning as intended. Proper monitoring of the compliance department was not occurring to detect deficiencies in tenant files documenting eligibility. S3800-033 Effect or Potential Effect: It is reasonably possible that ineligible tenants could improperly be granted tenancy to the property and given rental assistance for which they are not eligible. Such improper payments could be material. S3800-035 Auditor Non-Compliance Code: S – Internal Control Deficiencies S3800-040 Questioned Costs: $0 S3800-037: FHA Contract Number: 127-HD025 S3800-038: Questioned Costs: $0 S3800-045 Reporting Views of Responsible Officials: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent tenants from being improperly housed at the property and granted rental assistance for which they are not eligible. S3800-050 Context: For the six files tested, we noted some late or missing documentation regarding eligibility and rent calculations. S3800-080 Recommendation: Management has a process to review and approve all tenant certifications being prepared by site staff (community managers). The approval process should include an approval stamp or some other evidence that each file has been reviewed by the compliance department and is approved for processing. Further, senior management should have an ongoing monitoring process to ensure that the compliance department is carrying out the review process. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent tenants from being improperly housed at the property and granted rental assistance for which they are not eligible. S3800-130 Response Indicator: Agree (A) S3800-140 Completion Date: February 3, 2025 S3800-150 Response: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent tenants from being improperly housed at the property and granted rental assistance for which they are not eligible.
Finding 2024-002
FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT S3800-010 Finding Reference Number: 2024-002 S3800-011 Title and Assistance Number of Federal Program: 14.157 Supportive Housing for the Elderly S3800-015 Type of Finding: Federal Program Finding (FP) S3800-016 Finding Resolution Status: IN PROCESS S3800-017 Information on Universe Population Size: N/A - Not detected as a result of sampling procedures and testing. S3800-018 Sample Size Information: N/A - Not detected as a result of sampling procedures and testing. S3800-019 Identification of Repeat Finding and Finding Reference Number: 2023-002 S3800-020 Criteria: The HUD regulatory agreement requires monthly deposits to the replacement reserve account of $1,351. S3800-030 Statement of Condition: Management only made nine (9) of the twelve (12) monthly required reserve deposits, leaving the account underfunded by $4,053 at June 30, 2022; for the year ended June 30, 2023, only $2,702 of the required $16,212 in deposits were made, leaving the account behind schedule by another $13,510, for a total deficiency of $17,563; for the year ended June 30, 2024, only $5,404 of the required $16,212 in deposits were made, leaving the account behind schedule by another $10,808, for a total cumulative deficiency of $28,371. S3800-032 Cause: Management has properly designed controls to ensure all monthly deposits are made; however, the control is not functioning as intended, and the project has recently been experiencing liquidity problems. S3800-033 Effect or Potential Effect: The replacement reserve account is underfunded by $28,371. S3800-035 Auditor Non-Compliance Code: N – Reserve for Replacements Deposits S3800-040 Questioned Costs: $28,371 Details – Questioned Costs by Property S3800-037 FHA/Contract Number: 127-EE017 S3800-038 Questioned Costs: $28,371 S3800-045 Reporting Views of Responsible Officials: As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required reserve deposits and pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan pay all vendors for amounts owed and fund the reserve account. A rent increase may be necessary. S3800-050 Context: See statement of condition. S3800-080 Recommendation: Management should institute a monitoring process to ensure all required monthly deposits to the replacement reserve are made. Such processes could include initiating automatic recurring monthly transfers with the financial institution that maintains the replacement reserve account. We also recommend contacting the HUD project manager to develop a plan to pay all outstanding liabilities and fund the reserve account. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required reserve deposits and pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the reserve account. A rent increase may be necessary. S3800-0130 Response Indicator: Agree (A) S3800-0140 Completion Date: February 3, 2025 S3800-0150 Response: As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required reserve deposits and pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan pay all vendors for amounts owed and fund the reserve account. A rent increase may be necessary.
Finding 2024-003
FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT S3800-010 Finding Reference Number: 2024-003 S3800-011 Title and Assistance Number of Federal Program: 14.157 Supportive Housing for the Elderly S3800-015 Type of Finding: Federal Program Finding (FP) S3800-016 Finding Resolution Status: IN PROCESS S3800-017 Information on Universe Population Size: N/A - Not detected as a result of sampling procedures and testing. S3800-018 Sample Size Information: N/A - Not detected as a result of sampling procedures and testing. S3800-019 Identification of Repeat Finding and Finding Reference Number: 2023-003 S3800-020 Criteria: The HUD regulatory agreement requires pre-approval for all withdrawals from the residual receipts account. S3800-030 Statement of Condition: Management made an unauthorized withdrawal of $4,400 from the residual receipts account during the fiscal year ended June 30, 2022; the funds have not been returned to the residual receipts account. S3800-032 Cause: Management mistakenly withdrew funds from the residual receipts account during the year ended June 30, 2022 but did not make a deposit to replace those funds during the fiscal years ended June 30, 2023 or June 30, 2024. S3800-033 Effect or Potential Effect: The residual receipts account remains underfunded by $4,400. S3800-035 Auditor Non-Compliance Code: C – Unauthorized withdrawals from residual receipts account S3800-040 Questioned Costs: $4,400 Details – Questioned Costs by Property S3800-037 FHA/Contract Number: 127-EE017 S3800-038 Questioned Costs: $4,400 S3800-045 Reporting Views of Responsible Officials: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings prior to the discovery of the unrecorded expenses. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent such future occurrences. As a result of the discovered unpaid invoices discussed in Finding 2024-001, property management will be unable to make the required residual receipts reserve deposit or pay all vendors without a rent increase from HUD. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary. S3800-050 Context: Management made an unauthorized withdrawal of $4,400 from the residual receipts account during the fiscal year ended June 30, 2022; the funds have not been returned to the residual receipts account leaving the account underfunded by $4,400. S3800-080 Recommendation: Management should deposit $4,400 into the residual receipts account to refund the unapproved withdrawals. Management should also contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent such future occurrences. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary. S3800-0130 Response Indicator: Agree (A) S3800-0140 Completion Date: February 3, 2025 S3800-0150 Response: The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent such future occurrences. Management plans to contact the HUD Project Manager to develop a plan to get current with vendors and fund the residual receipts account. A rent increase may be necessary.
Finding 2024-004
FINDINGS – MAJOR FEDERAL AWARD PROGRAMS AUDIT S3800-010 Finding Reference Number: 2024-004 S3800-011 Title and Assistance Number of Federal Program: 14.157 Supportive Housing for the Elderly S3800-015 Type of Finding: Federal Award Finding S3800-016 Finding Resolution Status: In Process S3800-017 Information on Universe Population Size: 19 rental units S3800-018 Sample Size Information: 6 rental units S3800-019 Identification of Repeat Finding and Finding Reference Number: Not Applicable. S3800-020 Criteria: The Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework is a widely recognized framework for designing, implementing, and evaluating internal control systems. The COSO framework defines internal control as a process that is designed to provide reasonable assurance with respect to achievement of objectives of compliance with applicable laws and regulations. The COSO framework offers useful guiding principles that can be applied in establishing and operating an effective regulatory compliance program with the goal of closing compliance gaps, and ensuring the prevention of material noncompliance. The monitoring component of the COSO framework involves periodic or ongoing evaluations to verify that each of the five components internal control, including the controls that affect the principles within each component, are present and functioning. Monitoring helps ensure that internal controls continue to operate effectively. S3800-030 Statement of Condition: Management had developed activity level controls over compliance that included compliance review of all tenant certifications including income verifications used in determining the amount of rent amounts due from eligible PRAC 202 participants (tenants) by the management firm compliance department. However, during our testing it was discovered that the files were missing documentation of varying importance which if properly reviewed, should have been identified as missing; some files were missing evidence of file review. S3800-032 Cause: Management had properly designed activity level controls over compliance, but those controls were not functioning as intended. Proper monitoring of the compliance department was not occurring to detect deficiencies in tenant files documenting eligibility. S3800-033 Effect or Potential Effect: It is reasonably possible that ineligible tenants could improperly be granted tenancy to the property and given rental assistance for which they are not eligible. Such improper payments could be material. S3800-035 Auditor Non-Compliance Code: S – Internal Control Deficiencies S3800-040 Questioned Costs: $0 S3800-037: FHA Contract Number: 127-HD025 S3800-038: Questioned Costs: $0 S3800-045 Reporting Views of Responsible Officials: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent tenants from being improperly housed at the property and granted rental assistance for which they are not eligible. S3800-050 Context: For the six files tested, we noted some late or missing documentation regarding eligibility and rent calculations. S3800-080 Recommendation: Management has a process to review and approve all tenant certifications being prepared by site staff (community managers). The approval process should include an approval stamp or some other evidence that each file has been reviewed by the compliance department and is approved for processing. Further, senior management should have an ongoing monitoring process to ensure that the compliance department is carrying out the review process. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent tenants from being improperly housed at the property and granted rental assistance for which they are not eligible. S3800-130 Response Indicator: Agree (A) S3800-140 Completion Date: February 3, 2025 S3800-150 Response: The board had decided to change property management firms because of the history and severity of financial statement findings and major program fundings. The board believes that the new management firm has a properly designed and functioning system of internal controls to prevent tenants from being improperly housed at the property and granted rental assistance for which they are not eligible.