S3800-010: Finding Reference Number 2025-001 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N - Special Tests and Provisions S3800-015: Type of Finding Financial Statement and Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number 2024-001 S3800-020: Criteria In accordance with the regulatory agreement subsection 11(e) Organization’s books and records are maintained in accordance with generally accepted accounting principles and HUD guidelines. S3800-030: Statement of Condition Several misstatements were identified by the auditor in the unaudited financial statements and accounts of the Organization. S3800-032: Cause The Organization lacks adequate internal controls to ensure that books and records are kept accurately and completely. S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement requirement to maintain accurate and complete books and accounts. S3800-035: Auditor Non-Compliance Code S – Internal Control Deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context On the general ledger, various accounts such as rent, tenant security deposits and vacancies did not tie to supporting documentation. The beginning net assets balance did not roll forward from prior year ending net assets balance. The Organization did not have supporting documentation for accounts receivable, fixed assets, and to calculate casualty loss related to storm damage. S3800-080: Recommendation The Auditor recommends the Organization follows their policies and procedures to ensure that accounting records are kept accurate and complete, and a responsible official should review and sign off on the monthly financial statements. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date September 30, 2025 S3800-150: Response See Corrective Action Plan
S3800-010: Finding Reference Number 2025-002 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N - Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria In accordance with the regulatory agreement subsection 5(c), withdrawals from the Residual Receipts account may be made only for project purposes and with the approval of HUD. S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended March 31, 2025 federal award program, we noted that the Organization withdrew $732 from the residual receipts account on September 18, 2024, which was not approved by HUD. S3800-032: Cause Management thought that the account was an other operating bank account and did not know that the account held residual receipts. S3800-033: Effect or Potential Effect The withdrawal was not approved by HUD. S3800-035: Auditor Non-Compliance Code: C – Unauthorized withdrawals from residual receipts account S3800-040: Questioned Costs $732 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization is required to receive HUD approval for all withdrawals from the residual receipts account. S3800-080: Recommendation The Auditor recommends the Organization deposit $732 into the residual receipts account as soon as possible. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date July 31, 2025 S3800-150: Response See Corrective Action Plan
S3800-010: Finding Reference Number 2025-003 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N - Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria In accordance with the regulatory agreement subsection 5(a), the Organization is required to deposit $2,000 per month to the reserve for replacement account. S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended March 31, 2025 federal award program, we noted the Organization failed to make any deposits into the reserve for replacement account. S3800-032: Cause The Organization failed to make the required monthly deposits for the entire year due to cash flow limitations. S3800-033: Effect or Potential Effect The Organization was not in compliance with the regulatory agreement to make the required monthly deposits into the reserve for replacement account. S3800-035: Auditor Non-Compliance Code: N – Reserve for replacements deposits S3800-040: Questioned Costs $24,000 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization failed to make the required monthly deposits for the entire year due to cash flow shortage. S3800-080: Recommendation The Auditor recommends the Organization deposit the required monthly reserve for replacement amounts as soon as possible and/or request waiver of the deposit requirement from HUD. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date September 30, 2025 S3800-150: Response See Corrective Action Plan
S3800-010: Finding Reference Number 2025-004 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: E – Eligibility S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size 19 S3800-018: Sample Size Information 5 S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria HUD-subsidized, multifamily housing properties must follow specific guidelines for determining eligibility to determine whether they are in compliance with provisions in the HUD Handbook (4350.3). S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended March 31, 2025 federal award program, we noted the below concerns regarding adherence to HUD compliance requirements: • The Organization did not have the necessary supporting documentation to evaluate eligibility at the initial time of occupancy and annual recertification based on missing evidence of signed leases, security deposits, criminal and background information, verification of citizenship and immigration status, and move in inspections for three tenants in their files S3800-032: Cause The Organization did not follow HUD’s required procedures to determine eligibility. S3800-033: Effect or Potential Effect The Organization was not in compliance with the requirements of HUD related to determining initial eligibility and annual recertification. S3800-035: Auditor Non-Compliance Code R – Section 8 program administration S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization is required to be in compliance with provisions relating to tenant eligibility. S3800-080: Recommendation The Organization should follow procedures to ensure tenant eligibility and the Organization should review the accuracy / completeness of the documentation being processed in the tenant files on a periodic basis. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date September 30, 2025 S3800-150: Response See Corrective Action Plan
S3800-010: Finding Reference Number 2025-005 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: A/B – Activities Allowed or Unallowed and Allowable Costs/Cost Principles S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size >250 S3800-018: Sample Size Information 25 S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria In accordance with the regulatory agreement subsection 11(c), project funds may be used only for expenses that are reasonable and necessary to the operation of the project. S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended March 31, 2025 federal award program, we noted that the Organization did not maintain proper documentation to support expenditures for four of the twenty-five samples. S3800-032: Cause The Organization did not follow its procedures to include supporting documentation with all expenditures of project funds. S3800-033: Effect or Potential Effect The Organization was not in compliance with the requirements of HUD related to activities allowed or unallowed and allowable costs and cost principles and expenditures may not be allowed. S3800-035: Auditor Non-Compliance Code S – Internal control deficiencies S3800-040: Questioned Costs $2,462 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization is required to be in compliance with provisions relating to activities allowed or unallowed and allowable costs and cost principles. S3800-080: Recommendation The Organization should not expend project funds without supporting documentation. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date July 1, 2025 S3800-150: Response See Corrective Action Plan
S3800-010: Finding Reference Number 2025-006 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N – Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size Unknown S3800-018: Sample Size Information Unknown S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria In accordance with the regulatory agreement subsection 8, the Organization is required to maintain the property in good and substantial repair. HUD expects owners/agents to respond to valid resident request involving concerns about conditions at the project and to resolve all significant problems (HUD Handbook 4385.1). S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended March 31, 2025 federal award program, we noted work order system was not in place, as the Organization did not maintain a contemporaneous log work order requests. S3800-032: Cause The Organization did not follow its procedures regarding work orders. S3800-033: Effect or Potential Effect The Organization may not have maintained the property in good and substantial repair. S3800-035: Auditor Non-Compliance Code: S – Internal control deficiencies S3800-040: Questioned Costs None S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context Management failed to ensure that the work order process was being followed. S3800-080: Recommendation The Organization should ensure tenants requesting maintenance of property via work orders are being maintained properly and in a timely manner and review the accuracy / completeness of the documentation being processed in a work order system on a monthly basis. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agrees with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date September 30, 2025 S3800-150: Response See Corrective Action Plan
S3800-010: Finding Reference Number 2025-007 (Material Weakness) S3800-011: Program Information Federal Program: Supportive Housing for the Elderly (Section 202) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.157 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: A/B – Activities Allowed or Unallowed and Allowable Costs/Cost Principles S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size N/A S3800-018: Sample Size Information N/A S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria In accordance with the regulatory agreement subsection 11(k), no director shall have any financial interest in any contractual arrangement entered into the Organization in connection with the rendition of services thereto. S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended March 31, 2025 federal award program, we noted $1,553 was paid to a company affiliated with a member of the board of directors. S3800-032: Cause The Organization was not aware of the requirement contained in the regulatory agreement. S3800-033: Effect or Potential Effect The Organization expended project funds that were not permitted by the regulatory agreement. S3800-035: Auditor Non-Compliance Code: Z – Other S3800-040: Questioned Costs $1,553 S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization was not aware of the requirement contained in the regulatory agreement. S3800-080: Recommendation The Organization should obtain HUD’s permission to enter into a financial arrangement with an entity affiliated with a board member or obtain reimbursement of the expenditure. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agrees with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date July 31, 2025 S3800-150: Response See Corrective Action Plan