Audit 363519

FINDING No. 2024-001: Section 236 Interest Reduction Payments, ALN 14.103 Finding Resolution Status: Resolved. Information on Universe Population Size: All disbursements for the year ended December 31, 2024. Sample Size Information: Twenty-five disbursements. Identification of Repeat Finding and Finding Reference Number: No. Criteria: All purchases must be authorized by the appropriate level of management prior to disbursement. Statement of Condition: A purchase was not authorized by the appropriate level of management. Cause: A transaction in the amount of $15,019 was approved by a member of management who only had authorization to approve transactions up to $1,000. Effect or Potential Effect: Potential unauthorized use of project funds. Auditor Non-Compliance Code: S – Internal control deficiencies. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendation has been adopted. Recommendation: Management should ensure adherence to and the monitoring of established controls over cash disbursements. Response Indicator: Agree. Completion Date: 10/30/2024 Response: Staff training has been provided. New manager has been advised regarding limits. This was a glitch in the OPS Spend Management system.

FINDING No. 2024-002: Section 236 Interest Reduction Payments, ALN 14.103 Finding Resolution Status: Resolved. Information on Universe Population Size: One hundred twenty-two tenants. Sample Size Information: Twenty tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2023-001. Criteria: HUD regulations require timely verification and maintenance of documentation of a tenant’s income and other resident information through the Enterprise Income Verification (EIV) system that is performed within 90 days of the tenant being entered into the Tenant Rental Assistance Certification System (TRACS). Statement of Condition: The Project verified income and other resident information of one of its Section 236 tenants subsequent to the 90 day requirement. Cause: The Project did not adhere to HUD regulations for continuing eligibility and did not verify income and other resident information within the established time frame. Effect or Potential Effect: Untimely verification of tenant eligibility and cost of assistance and residency 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 have been adopted. Recommendation: Management should implement procedures to ensure the Project verifies tenant eligibility through the EIV system within the established time frame. Response Indicator: Agree. Completion Date: 07/03/2024 Response: Staff training has been provided with additional HUD training inclusive of EIV reporting.

FINDING No. 2024-001: Section 236 Interest Reduction Payments, ALN 14.103 Finding Resolution Status: Resolved. Information on Universe Population Size: All disbursements for the year ended December 31, 2024. Sample Size Information: Twenty-five disbursements. Identification of Repeat Finding and Finding Reference Number: No. Criteria: All purchases must be authorized by the appropriate level of management prior to disbursement. Statement of Condition: A purchase was not authorized by the appropriate level of management. Cause: A transaction in the amount of $15,019 was approved by a member of management who only had authorization to approve transactions up to $1,000. Effect or Potential Effect: Potential unauthorized use of project funds. Auditor Non-Compliance Code: S – Internal control deficiencies. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendation has been adopted. Recommendation: Management should ensure adherence to and the monitoring of established controls over cash disbursements. Response Indicator: Agree. Completion Date: 10/30/2024 Response: Staff training has been provided. New manager has been advised regarding limits. This was a glitch in the OPS Spend Management system.

FINDING No. 2024-002: Section 236 Interest Reduction Payments, ALN 14.103 Finding Resolution Status: Resolved. Information on Universe Population Size: One hundred twenty-two tenants. Sample Size Information: Twenty tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2023-001. Criteria: HUD regulations require timely verification and maintenance of documentation of a tenant’s income and other resident information through the Enterprise Income Verification (EIV) system that is performed within 90 days of the tenant being entered into the Tenant Rental Assistance Certification System (TRACS). Statement of Condition: The Project verified income and other resident information of one of its Section 236 tenants subsequent to the 90 day requirement. Cause: The Project did not adhere to HUD regulations for continuing eligibility and did not verify income and other resident information within the established time frame. Effect or Potential Effect: Untimely verification of tenant eligibility and cost of assistance and residency 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 have been adopted. Recommendation: Management should implement procedures to ensure the Project verifies tenant eligibility through the EIV system within the established time frame. Response Indicator: Agree. Completion Date: 07/03/2024 Response: Staff training has been provided with additional HUD training inclusive of EIV reporting.