Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-001
Condition: Missing required documentation. Enterprise Income Verification (EIV) reports were not able to be run, due to the license expiring and the person with the license was no longer working at the organization.
Criteria: HUD requires EIV forms to be run, monthly, quarterly and annually.
Effect: Required documents were not in the files.
Context: Auditor reviewed tenant files noting the form was not present in the tenant files.
Cause: Lack of oversight by management agent. The one individual with the EIV license was no longer working at the Organization.
Recommendation: A system should be in place requiring more than one individual to have an EIV license and ensure the license does not lapse.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-002
Condition: Several tenants were not recertified in accordance with HUD guidelines.
Criteria: All tenants must be recertified annually. Tenants must provide all income information at recertification.
Effect: HUD subsidy may be overstated.
Context: Auditor selected tenant files and discussed with the management agent that due to understaffing, there were difficulties in obtaining the appropriate documentation and therefore completing accurate 50059 forms.
Cause: Lack of oversight by management agent.
Recommendation: Continue to hire and train additional staff to fill the staffing shortages.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-001
Condition: Missing required documentation. Enterprise Income Verification (EIV) reports were not able to be run, due to the license expiring and the person with the license was no longer working at the organization.
Criteria: HUD requires EIV forms to be run, monthly, quarterly and annually.
Effect: Required documents were not in the files.
Context: Auditor reviewed tenant files noting the form was not present in the tenant files.
Cause: Lack of oversight by management agent. The one individual with the EIV license was no longer working at the Organization.
Recommendation: A system should be in place requiring more than one individual to have an EIV license and ensure the license does not lapse.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-002
Condition: Several tenants were not recertified in accordance with HUD guidelines.
Criteria: All tenants must be recertified annually. Tenants must provide all income information at recertification.
Effect: HUD subsidy may be overstated.
Context: Auditor selected tenant files and discussed with the management agent that due to understaffing, there were difficulties in obtaining the appropriate documentation and therefore completing accurate 50059 forms.
Cause: Lack of oversight by management agent.
Recommendation: Continue to hire and train additional staff to fill the staffing shortages.
Information on universe/sample size: It was noted during testing that some of the HUD form certifiers were not updated in a timely manner.
Identification of repeat finding: Yes, 2023-003
Condition: HUD forms must be certified by an authorized user.
Criteria: The certifier for HUD forms should be a current employee with oversight in the area the form pertains to.
Effect: The forms were not certified by the correct individual.
Context: Auditor reviewed source documents noting incorrect certifier.
Cause: Lack of oversight by management agent.
Recommendation: A procedure be implemented to ensure that the Project timely changes the certifier on forms when applicable.
Information on universe/sample size: It was noted during testing that some of the HUD form certifiers were not updated in a timely manner.
Identification of repeat finding: Yes, 2023-003
Condition: HUD forms must be certified by an authorized user.
Criteria: The certifier for HUD forms should be a current employee with oversight in the area the form pertains to.
Effect: The forms were not certified by the correct individual.
Context: Auditor reviewed source documents noting incorrect certifier.
Cause: Lack of oversight by management agent.
Recommendation: A procedure be implemented to ensure that the Project timely changes the certifier on forms when applicable.
Information on universe: Payroll control testing.
Sample size: Five employees selected for internal control testing.
Identification of repeat finding: Yes, 2023-004
Condition: Lack of detailed job duties, review and approvals on time allocated and charged to the property as well as one employee missing allocations.
Criteria: Time sheets should have detailed allocations and job duties as well as be reviewed and approved.
Effect: Allocation sheets had errors, therefore causing improper charges to the property.
Context: Auditor selected timesheets for payroll control testing.
Cause: Lack of oversight.
Recommendation: Time sheets should have detailed job duties performed and time allocated to the property based on these duties performed. The time sheets then need to be reviewed and approved.
Information on universe: Payroll control testing.
Sample size: Five employees selected for internal control testing.
Identification of repeat finding: Yes, 2023-004
Condition: Lack of detailed job duties, review and approvals on time allocated and charged to the property as well as one employee missing allocations.
Criteria: Time sheets should have detailed allocations and job duties as well as be reviewed and approved.
Effect: Allocation sheets had errors, therefore causing improper charges to the property.
Context: Auditor selected timesheets for payroll control testing.
Cause: Lack of oversight.
Recommendation: Time sheets should have detailed job duties performed and time allocated to the property based on these duties performed. The time sheets then need to be reviewed and approved.
Information on universe/sample size: It was noted during testing that the Property is not utilizing the replacement reserves for its main purpose.
Identification of repeat finding: No
Condition: The Property should be utilizing its restricted funds from the replacement reserve.
Criteria: The replacement reserve is to aid in funding extraordinary maintenance and repair costs of the property.
Effect: Cash flow issues for the property, with high balances in the replacement reserve.
Context: Auditor noted low operating cash balances and high related party payables, but a significant balance for the replacement reserve account.
Cause: Significant turnover at the management agent and lack of monitoring/review.
Recommendation: Regularly assess reserve balances and implement a procedure in order to consistently utilize the funds of the replacement reserve as outlined by HUD.
Information on universe/sample size: It was noted during testing that the Property is not utilizing the replacement reserves for its main purpose.
Identification of repeat finding: No
Condition: The Property should be utilizing its restricted funds from the replacement reserve.
Criteria: The replacement reserve is to aid in funding extraordinary maintenance and repair costs of the property.
Effect: Cash flow issues for the property, with high balances in the replacement reserve.
Context: Auditor noted low operating cash balances and high related party payables, but a significant balance for the replacement reserve account.
Cause: Significant turnover at the management agent and lack of monitoring/review.
Recommendation: Regularly assess reserve balances and implement a procedure in order to consistently utilize the funds of the replacement reserve as outlined by HUD.
Information on universe/sample size: It was noted during testing that the management agent was not able to perform management duties in a timely manner.
Identification of repeat finding: No
Condition: All management agent duties should be performed timely.
Criteria: Tenant units should be filled in a timely manner; existing tenants need to be recertified annually.
Effect: There were significant vacancies and some tenant’s subsidies had expired.
Context: Auditor noted the vacancies and file issues during testing.
Cause: Significant turnover at the management agent.
Recommendation: The management agent should hire a consultant to assist with performing the necessary management agent duties until they are fully staffed.
Information on universe/sample size: It was noted during testing that the management agent was not able to perform management duties in a timely manner.
Identification of repeat finding: No
Condition: All management agent duties should be performed timely.
Criteria: Tenant units should be filled in a timely manner; existing tenants need to be recertified annually.
Effect: There were significant vacancies and some tenant’s subsidies had expired.
Context: Auditor noted the vacancies and file issues during testing.
Cause: Significant turnover at the management agent.
Recommendation: The management agent should hire a consultant to assist with performing the necessary management agent duties until they are fully staffed.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-001
Condition: Missing required documentation. Enterprise Income Verification (EIV) reports were not able to be run, due to the license expiring and the person with the license was no longer working at the organization.
Criteria: HUD requires EIV forms to be run, monthly, quarterly and annually.
Effect: Required documents were not in the files.
Context: Auditor reviewed tenant files noting the form was not present in the tenant files.
Cause: Lack of oversight by management agent. The one individual with the EIV license was no longer working at the Organization.
Recommendation: A system should be in place requiring more than one individual to have an EIV license and ensure the license does not lapse.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-002
Condition: Several tenants were not recertified in accordance with HUD guidelines.
Criteria: All tenants must be recertified annually. Tenants must provide all income information at recertification.
Effect: HUD subsidy may be overstated.
Context: Auditor selected tenant files and discussed with the management agent that due to understaffing, there were difficulties in obtaining the appropriate documentation and therefore completing accurate 50059 forms.
Cause: Lack of oversight by management agent.
Recommendation: Continue to hire and train additional staff to fill the staffing shortages.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-001
Condition: Missing required documentation. Enterprise Income Verification (EIV) reports were not able to be run, due to the license expiring and the person with the license was no longer working at the organization.
Criteria: HUD requires EIV forms to be run, monthly, quarterly and annually.
Effect: Required documents were not in the files.
Context: Auditor reviewed tenant files noting the form was not present in the tenant files.
Cause: Lack of oversight by management agent. The one individual with the EIV license was no longer working at the Organization.
Recommendation: A system should be in place requiring more than one individual to have an EIV license and ensure the license does not lapse.
Information on universe: Total population was 41 units.
Sample Size: 5 files were selected for testing.
Identification of repeat finding: Yes, 2023-002
Condition: Several tenants were not recertified in accordance with HUD guidelines.
Criteria: All tenants must be recertified annually. Tenants must provide all income information at recertification.
Effect: HUD subsidy may be overstated.
Context: Auditor selected tenant files and discussed with the management agent that due to understaffing, there were difficulties in obtaining the appropriate documentation and therefore completing accurate 50059 forms.
Cause: Lack of oversight by management agent.
Recommendation: Continue to hire and train additional staff to fill the staffing shortages.
Information on universe/sample size: It was noted during testing that some of the HUD form certifiers were not updated in a timely manner.
Identification of repeat finding: Yes, 2023-003
Condition: HUD forms must be certified by an authorized user.
Criteria: The certifier for HUD forms should be a current employee with oversight in the area the form pertains to.
Effect: The forms were not certified by the correct individual.
Context: Auditor reviewed source documents noting incorrect certifier.
Cause: Lack of oversight by management agent.
Recommendation: A procedure be implemented to ensure that the Project timely changes the certifier on forms when applicable.
Information on universe/sample size: It was noted during testing that some of the HUD form certifiers were not updated in a timely manner.
Identification of repeat finding: Yes, 2023-003
Condition: HUD forms must be certified by an authorized user.
Criteria: The certifier for HUD forms should be a current employee with oversight in the area the form pertains to.
Effect: The forms were not certified by the correct individual.
Context: Auditor reviewed source documents noting incorrect certifier.
Cause: Lack of oversight by management agent.
Recommendation: A procedure be implemented to ensure that the Project timely changes the certifier on forms when applicable.
Information on universe: Payroll control testing.
Sample size: Five employees selected for internal control testing.
Identification of repeat finding: Yes, 2023-004
Condition: Lack of detailed job duties, review and approvals on time allocated and charged to the property as well as one employee missing allocations.
Criteria: Time sheets should have detailed allocations and job duties as well as be reviewed and approved.
Effect: Allocation sheets had errors, therefore causing improper charges to the property.
Context: Auditor selected timesheets for payroll control testing.
Cause: Lack of oversight.
Recommendation: Time sheets should have detailed job duties performed and time allocated to the property based on these duties performed. The time sheets then need to be reviewed and approved.
Information on universe: Payroll control testing.
Sample size: Five employees selected for internal control testing.
Identification of repeat finding: Yes, 2023-004
Condition: Lack of detailed job duties, review and approvals on time allocated and charged to the property as well as one employee missing allocations.
Criteria: Time sheets should have detailed allocations and job duties as well as be reviewed and approved.
Effect: Allocation sheets had errors, therefore causing improper charges to the property.
Context: Auditor selected timesheets for payroll control testing.
Cause: Lack of oversight.
Recommendation: Time sheets should have detailed job duties performed and time allocated to the property based on these duties performed. The time sheets then need to be reviewed and approved.
Information on universe/sample size: It was noted during testing that the Property is not utilizing the replacement reserves for its main purpose.
Identification of repeat finding: No
Condition: The Property should be utilizing its restricted funds from the replacement reserve.
Criteria: The replacement reserve is to aid in funding extraordinary maintenance and repair costs of the property.
Effect: Cash flow issues for the property, with high balances in the replacement reserve.
Context: Auditor noted low operating cash balances and high related party payables, but a significant balance for the replacement reserve account.
Cause: Significant turnover at the management agent and lack of monitoring/review.
Recommendation: Regularly assess reserve balances and implement a procedure in order to consistently utilize the funds of the replacement reserve as outlined by HUD.
Information on universe/sample size: It was noted during testing that the Property is not utilizing the replacement reserves for its main purpose.
Identification of repeat finding: No
Condition: The Property should be utilizing its restricted funds from the replacement reserve.
Criteria: The replacement reserve is to aid in funding extraordinary maintenance and repair costs of the property.
Effect: Cash flow issues for the property, with high balances in the replacement reserve.
Context: Auditor noted low operating cash balances and high related party payables, but a significant balance for the replacement reserve account.
Cause: Significant turnover at the management agent and lack of monitoring/review.
Recommendation: Regularly assess reserve balances and implement a procedure in order to consistently utilize the funds of the replacement reserve as outlined by HUD.
Information on universe/sample size: It was noted during testing that the management agent was not able to perform management duties in a timely manner.
Identification of repeat finding: No
Condition: All management agent duties should be performed timely.
Criteria: Tenant units should be filled in a timely manner; existing tenants need to be recertified annually.
Effect: There were significant vacancies and some tenant’s subsidies had expired.
Context: Auditor noted the vacancies and file issues during testing.
Cause: Significant turnover at the management agent.
Recommendation: The management agent should hire a consultant to assist with performing the necessary management agent duties until they are fully staffed.
Information on universe/sample size: It was noted during testing that the management agent was not able to perform management duties in a timely manner.
Identification of repeat finding: No
Condition: All management agent duties should be performed timely.
Criteria: Tenant units should be filled in a timely manner; existing tenants need to be recertified annually.
Effect: There were significant vacancies and some tenant’s subsidies had expired.
Context: Auditor noted the vacancies and file issues during testing.
Cause: Significant turnover at the management agent.
Recommendation: The management agent should hire a consultant to assist with performing the necessary management agent duties until they are fully staffed.