Audit 367393

Finding No. 2024-1; Section 8, Assistance Listing 14.195 Criteria In accordance with HUD program guidelines under which the Project operates, the annual tenant recertification Form 50059 is required to be signed by the tenant prior to the required annual recertification date. Condition In connection with lease file testing, we noted 6 out of 8 tenant files did not have annual tenant recertification Form 50059 completed timely. Cause Personnel responsible for tenant recertifications failed to obtain signatures on all Forms 50059 prior to the required annual recertification date. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Recommendation The cooperative should ensure that all Form 50059s are signed by the tenant prior to the required annual recertification date. Auditor Noncompliance Code Section 8 program administration Finding Resolution Status In process Reporting Views of Responsible Officials We concur that certain 50059s were not signed timely. We are training staff and monitoring compliance at this property to ensure 50059s are timely signed or residents will be placed in legal.

Finding No. 2024-2; Section 8, Assistance Listing 14.195 Criteria In accordance with the HAP contract, management is required to maintain the property in good repair. Condition Management failed to maintain the property in good repair and received a score of 42 in its 2024 REAC Physical Inspection. Cause The procedures to ensure compliance with HUD regulations regarding physical condition of the property were not followed. Effect or Potential Effect The project was unable to obtain a passing score on its REAC inspection. Questioned Costs None Recommendation Management should correct all findings noted in the NSPIRE Physical Inspection Report in the time frames requested in the physical inspection. Auditor Noncompliance Code Section 8 program administration I - Failure to maintain property/open physical inspection Finding Resolution Status In process. A second inspection was completed in 2024 and the property received a score of 56. Reporting Views of Responsible Officials This property has suffered post hurricane with reduced population, staffing shortages, and increased costs. The NSPIRE scores reflect the challenges the property faces. Scores have improved but additional work will need to be completed to ensure a passing score. The property is a subsidized cooperative will limited resources. The property and the Agent will continue to improve conditions at the property to ensure a passing score. Staff is being trained and the managing agent is supplementing the on site staff. Additional training is being provided

Finding No. 2024-3; Section 8, Assistance Listing 14.195 Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review, we noted the following deficiencies: One of out of one new tenant tested did not have EIV run timely for recertification. Cause Management's policies with respect to the determination of tenant eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code R - Section 8 program administration Finding Resolution Status In process Reporting Views of Responsible Officials We concur that EIV reports were not timely filed. Staff has been stabilized and will ensure that reports are run timely. Training and monitoring will be provided.

Finding No. 2024-4; Section 8, Assistance Listing 14.195 Criteria Management fee payments are limited to amounts determined in accordance with terms of the management agreement. Condition During the year ended December 31, 2024, the project paid management fees of $7,864 in excess of the amount approved by HUD. Cause Lack of management oversight caused management fees to be overpaid during the current year. Effect or Potential Effect The overpaid amount is an unauthorized distribution and therefore considered to be questioned costs. Questioned Costs $7,864 Recommendation The management company should reimburse the project for overpaid management fee in the amount of $7,864 and implement procedures to ensure that the management fee paid does not exceed the amount determined in accordance with the management agreement. Auditor Noncompliance Code J - Unauthorized management fees Finding Resolution Status Management discovered the issue and reimbursed the project in 2025. Reporting Views of Responsible Officials We agree that management fees were miscalculated. The Managing Agent caught the error on the management fees and reimbursed the cooperative. The management fees have been automated in July of 2025 to ensure accuracy.