FINDING No. 2024-001: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: Two hundred fifty-seven tenants.
Sample Size Information: Twenty-five tenants.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: HUD regulations require all initial and ongoing tenant eligibility documentation to be obtained timely and maintained during tenancy.
Statement of Condition: Missing documentation in tenant files:
Six tenants were missing required signed lease addendums.
One tenant was missing a signed and dated apartment application.
One tenant did not include the VAWA lease addendum.
One tenant was missing the criminal background check.
Cause: The Project did not maintain appropriate tenant eligibility documentation as required by HUD.
Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed.
Auditor Non-Compliance Code: R – Section 8 Program Administration
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should implement procedures to ensure that proper initial eligibility procedures are conducted for potential tenants and that tenant files are accurately maintained.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Monthly reminders are being sent to all managers to run their EIV reports for the month. In addition, random files are being reviewed by compliance to ensure EIV reports are pulled, unit inspections performed, and required documentation is complete and accurate.
FINDING No. 2024-002: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All replacement reserve deposits for the year ended June 30, 2024.
Sample Size Information: All replacement reserve deposits for the year ended June 30, 2024.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: HUD regulations require OCAF rent adjusted projects to increase its monthly replacement reserve funding by a similar factor as the authorized rent increase. In addition, HUD requires the correct authorized monthly deposit be made to the replacement reserve account.
Statement of Condition: The Project did not increase the required monthly deposit to the replacement reserve account for one month corresponding with the OCAF rent increase. In addition, the Project overfunded one of its required monthly deposits by $1,025 which was later withdrawn to correct the account. In total, the replacement reserve was underfunded by $271.
Cause: An increase in funding was not implemented and the incorrect required monthly amount was deposited and later corrected without HUD authorization. See Finding 2024-004.
Effect or Potential Effect: Deficiently funded reserve for replacement account.
Auditor Non-Compliance Code: N – Reserve for Replacements Deposits.
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should implement procedures to ensure that replacement reserve monthly deposits are increased at a factor in line with the authorized OCAF rental increase or HUD stipulated factor and that the correct required monthly amount is deposited into the replacement reserve account.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Staff training has been provided and included in monthly reporting procedures.
FINDING No. 2024-003: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: Residual receipts account.
Sample Size Information: Residual receipts account.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: As required by HUD regulations, residual receipts account balances in excess of $250 per unit must be applied on a monthly basis to offset Section 8 HAP payments up to the full amount of the monthly subsidy request, depending on the amount of residual receipts available for the offset. Monthly offsets must continue until the residual receipts account reaches the retained balance level of $250 per unit.
Statement of Condition: The Project's excess residual receipts of $13,156 were offset against current year HAP vouchers without proper submission of HUD-9250 form to withdraw these funds from the residual receipts account.
Cause: The Project did not comply with HUD requirements to submit a HUD-9250 request to transfer excess funds.
Effect or Potential Effect: The excess funds remaining in the residual receipts account were not available for use in project operations.
Auditor Non-Compliance Code: R – Section 8 Program Admin.
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should ensure that excess residual receipts funds are authorized by HUD for withdrawal prior to offsetting the funds against monthly HAP vouchers to avoid those funds not being available for use in operations.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Staff training has been provided to ensure proper procedures are followed.
FINDING No. 2024-004: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All replacement reserve deposits for the year ended June 30, 2024.
Sample Size Information: All replacement reserve deposits for the year ended June 30, 2024.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: In accordance with HUD requirements, any request to withdraw funds from the replacement reserve account must be accompanied by an approved form HUD-9250.
Statement of Condition: The Project withdrew $1,025 of excess deposits without proper authorization.
Cause: The Project did not obtain prior authorization for withdrawal of funds from the replacement reserve.
Effect or Potential Effect: The Project's lack of proper authorization for fund withdrawals may result in the improper use of funds.
Auditor Non-Compliance Code: A – Unauthorized withdrawals from replacement reserve
account
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should ensure that all withdrawals from the replacement reserve account are accompanied by an approved form HUD-9250.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Staff training has been provided to ensure proper procedures are followed.
FINDING No. 2024-001: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: Two hundred fifty-seven tenants.
Sample Size Information: Twenty-five tenants.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: HUD regulations require all initial and ongoing tenant eligibility documentation to be obtained timely and maintained during tenancy.
Statement of Condition: Missing documentation in tenant files:
Six tenants were missing required signed lease addendums.
One tenant was missing a signed and dated apartment application.
One tenant did not include the VAWA lease addendum.
One tenant was missing the criminal background check.
Cause: The Project did not maintain appropriate tenant eligibility documentation as required by HUD.
Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed.
Auditor Non-Compliance Code: R – Section 8 Program Administration
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should implement procedures to ensure that proper initial eligibility procedures are conducted for potential tenants and that tenant files are accurately maintained.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Monthly reminders are being sent to all managers to run their EIV reports for the month. In addition, random files are being reviewed by compliance to ensure EIV reports are pulled, unit inspections performed, and required documentation is complete and accurate.
FINDING No. 2024-002: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All replacement reserve deposits for the year ended June 30, 2024.
Sample Size Information: All replacement reserve deposits for the year ended June 30, 2024.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: HUD regulations require OCAF rent adjusted projects to increase its monthly replacement reserve funding by a similar factor as the authorized rent increase. In addition, HUD requires the correct authorized monthly deposit be made to the replacement reserve account.
Statement of Condition: The Project did not increase the required monthly deposit to the replacement reserve account for one month corresponding with the OCAF rent increase. In addition, the Project overfunded one of its required monthly deposits by $1,025 which was later withdrawn to correct the account. In total, the replacement reserve was underfunded by $271.
Cause: An increase in funding was not implemented and the incorrect required monthly amount was deposited and later corrected without HUD authorization. See Finding 2024-004.
Effect or Potential Effect: Deficiently funded reserve for replacement account.
Auditor Non-Compliance Code: N – Reserve for Replacements Deposits.
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should implement procedures to ensure that replacement reserve monthly deposits are increased at a factor in line with the authorized OCAF rental increase or HUD stipulated factor and that the correct required monthly amount is deposited into the replacement reserve account.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Staff training has been provided and included in monthly reporting procedures.
FINDING No. 2024-003: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: Residual receipts account.
Sample Size Information: Residual receipts account.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: As required by HUD regulations, residual receipts account balances in excess of $250 per unit must be applied on a monthly basis to offset Section 8 HAP payments up to the full amount of the monthly subsidy request, depending on the amount of residual receipts available for the offset. Monthly offsets must continue until the residual receipts account reaches the retained balance level of $250 per unit.
Statement of Condition: The Project's excess residual receipts of $13,156 were offset against current year HAP vouchers without proper submission of HUD-9250 form to withdraw these funds from the residual receipts account.
Cause: The Project did not comply with HUD requirements to submit a HUD-9250 request to transfer excess funds.
Effect or Potential Effect: The excess funds remaining in the residual receipts account were not available for use in project operations.
Auditor Non-Compliance Code: R – Section 8 Program Admin.
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should ensure that excess residual receipts funds are authorized by HUD for withdrawal prior to offsetting the funds against monthly HAP vouchers to avoid those funds not being available for use in operations.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Staff training has been provided to ensure proper procedures are followed.
FINDING No. 2024-004: Section 8 Project Based Rental Assistance ALN 14.195
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All replacement reserve deposits for the year ended June 30, 2024.
Sample Size Information: All replacement reserve deposits for the year ended June 30, 2024.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: In accordance with HUD requirements, any request to withdraw funds from the replacement reserve account must be accompanied by an approved form HUD-9250.
Statement of Condition: The Project withdrew $1,025 of excess deposits without proper authorization.
Cause: The Project did not obtain prior authorization for withdrawal of funds from the replacement reserve.
Effect or Potential Effect: The Project's lack of proper authorization for fund withdrawals may result in the improper use of funds.
Auditor Non-Compliance Code: A – Unauthorized withdrawals from replacement reserve
account
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted.
Recommendation: The Project should ensure that all withdrawals from the replacement reserve account are accompanied by an approved form HUD-9250.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: Staff training has been provided to ensure proper procedures are followed.