Audit 370923

FINDING No. 2025-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Escrow accounts. Sample Size Information: Escrow accounts. Identification of Repeat Finding and Finding Reference Number: Yes, 2024-001. Criteria: As required by the regulatory agreement, the Project is required to pay, when due, all taxes, assessments and other charges. Statement of Condition: The Project is deficient in funding escrow deposits in the amount of $12,544. Cause: The Project did not properly fund the escrow account based on current period insurance premiums and tax rates. Also, management incorrectly allocated the Project’s workers’ compensation premium resulting in a larger payment than required. Finally, at year-end, a large transfer was made from the insurance escrow account to the operating account to cover other operating costs. Effect or Potential Effect: The escrow deposits are not sufficient to meet future obligations. Auditor Non-Compliance Code: Z – Other Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should make sufficient deposits to the escrow account in a timely manner and correctly allocate policy premiums. The excess workers’ compensation policy premium should be returned to the Project. Also, the Project should replenish the funds that were transferred from the escrow account to the operating account and improve monitoring of the escrow account balance to ensure it is properly funded. Response Indicator: Agree. Completion Date: 3/31/2026 Response: The Project will fund the shortfall and replenish funds that were incorrectly transferred from the escrow account. Escrow balances will be reviewed on a regular basis to ensure adequate funding.

FINDING No. 2025-002: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Forty-six tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. 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 tenant 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 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 were adopted. Recommendation: Management should implement procedures to ensure that all initial and ongoing tenant eligibility documentation is obtained timely and maintained in tenant files as required by HUD. Response Indicator: Agree. Completion Date: 02/08/2025 Response: Staff training has been provided with additional HUD training inclusive of EIV reporting and tenant file maintenance and included in monthly reporting procedures.