FAC Explorer

Audit 3821

FY End
2022-12-31
Total Expended
$7.88M
Findings
4
Programs
2
Organization: Victory Crest, Inc. (MD)
Year: 2022 Accepted: 2023-11-20
Auditor: Cohnreznick LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
2241 2022-001 Material Weakness - E
2242 2022-002 Material Weakness - E
578683 2022-001 Material Weakness - E
578684 2022-002 Material Weakness - E

Programs

ALN Program Spent Major Findings
14.157 Supportive Housing for the Elderly $6.87M Yes 2
14.239 Home Investment Partnerships Program $1.01M - 0

Contacts

Name Title Type
RCPGJMVN4H13 Sarah O'Rielly Auditee
3014936000 Russell Phillips Auditor
No contacts on file

Notes to SEFA

Accounting Policies: The accompanying schedule of expenditures of federal awards ("Schedule") includes the federal award activity of Victory Crest, Inc. HUD Project No. 000-EE066, under programs of the federal government for the period July 1, 2022 through December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ("Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Victory Crest, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Victory Crest, Inc. For the period ended December 31, 2022, no awards were passed through to subrecipients. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, the cost principles contained in OMB Circular A-122, "Cost Principles for Non-Profit Organizations" and the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Victory Crest, Inc. has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. No indirect costs noted.

Finding Details

Finding 2022-001
Criteria - Eligibility 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: 1 out of 7 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. 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: N/A Context The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding Recommendation Management should establish procedures and monitor compliance with those procedures to insure 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 Views of Responsible Officials The onsite team members have received refresher training and have the EIV binder available. They have also set calendar reminders to make sure that EIV reports are pulled in a timely manner. The regional manager will be following up with the onsite staff to make sure they are in compliance.
Finding 2022-002
Criteria - Eligibility Management is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Condition During the procedures applied to a sample of seven tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding dissemination of EIV information. One instance where EIV information was provided in electronic format to the independent public accountant was noted. Cause Management company employees failed to follow the policies and procedures which have been established for the proper dissemination of EIV information in accordance with guidelines specified by HUD. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned Costs: N/A Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and policies and procedures regarding the handling of EIV reports have been reviewed with the team so that they will remain in compliance so the EIV reports do not leave the property. The regional manager will be following up with the onsite staff to make sure they are in compliance.
Finding 2022-001
Criteria - Eligibility 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: 1 out of 7 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. 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: N/A Context The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding Recommendation Management should establish procedures and monitor compliance with those procedures to insure 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 Views of Responsible Officials The onsite team members have received refresher training and have the EIV binder available. They have also set calendar reminders to make sure that EIV reports are pulled in a timely manner. The regional manager will be following up with the onsite staff to make sure they are in compliance.
Finding 2022-002
Criteria - Eligibility Management is responsible for adhering to the EIV Rules of Behavior in accordance with Section 4.1.1 of the EIV Multifamily Program User Manual. Condition During the procedures applied to a sample of seven tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding dissemination of EIV information. One instance where EIV information was provided in electronic format to the independent public accountant was noted. Cause Management company employees failed to follow the policies and procedures which have been established for the proper dissemination of EIV information in accordance with guidelines specified by HUD. Effect or Potential Effect Noncompliance with HUD guidelines could result in tenant personal information being disseminated to unauthorized individuals. Questioned Costs: N/A Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish additional procedures and monitor compliance with those procedures to ensure proper dissemination of EIV information in accordance with guidelines specified by HUD. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and policies and procedures regarding the handling of EIV reports have been reviewed with the team so that they will remain in compliance so the EIV reports do not leave the property. The regional manager will be following up with the onsite staff to make sure they are in compliance.