Audit 382791

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2025-001: SECTION 202, ASSISTANCE LISTING NUMBER 14.157 Condition: One of the tenant files tested contained a mathematical error in computing the tenant's medical expense deduction in the process of computing the tenant share of monthly rent. Criteria: The medical expense deduction should be computed accurately based on information provided by the tenant. Effect: There is no financial effect. Context: A sample of tenant files was selected for testing the medical expense deduction in the process of computing the tenant share of monthly rent. The test found a calculation that was not in compliance. The non-compliance did not have a financial effect. The details and results of the sample are as follows: Population - 47, Sample - 5, Not in Compliance - 1, $216; Questioned Costs - $216; Cause: There was an error in interpreting some information provided by the tenant during the recertification process. Recommendation: The Project should recompute the HUD subsidy and tenant rent for this tenant. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Tenant rent will be recomputed and management will adjust a future monthly HUD billing. Total-Department of Housing and Urban Development- $216; Non-compliance code: R

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2025-002: SECTION 202, ASSISTANCE LISTING NUMBER 14.157 Condition: The Project overpaid management fees by $341 to the management company. Criteria: Management fees should be calculated according to HUD guidelines. Effect: The Project's management fee is overstated. Context: The management fee for the year was tested for accuracy. The test determined that the management fee charged by the management company was more than the calculated amount. No sample was tested. Population - $59,041; Sample - $59,041; Not in Compliance - $341; Questioned Costs - $341; Cause: The management company did not compute the management fee correctly. Recommendation: The management company should reimburse the Project for the $341 overpayment. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. The management company will repay the overpaid management fee as soon as possible. Total-Department of Housing and Urban Development - $341; Non-compliance code: J

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2025-003: SECTION 202, ASSISTANCE LISTING NUMBER 14.157 Condition: The Project's replacement reserve cash balance was underfunded at September 30, 2025. Criteria: The management company failed to make the correct monthly deposit amount into the account. Effect: The replacement reserve cash balance was $88 less than it should be at September 30, 2025. Context: Activity in the replacement reserve account for the year ended September 30, 2025 was tested. No sample was tested. Questioned Costs - $88; Cause: The management company failed to increase the monthly deposit amount during the correct month. Recommendation: The Project should deposit $88 into the replacement reserve account. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $88 into the replacement reserve account. Total-Department of Housing and Urban Development - $88; Non-compliance code: N