Finding 2025-001: Supportive Housing for Persons with Disabilities, Federal Assistance Listing Number 14.181 Criteria: HUD requires Section 811 Project Rental Assistance Contract (PRAC) properties to remit residual receipts balances in excess of $250 per unit to HUD’s Accounting Center upon termination/renewal of the PRAC contract. Condition: The Organization’s residual receipts account exceeded the $250 per unit retained balance at the PRAC anniversary/renewal date, but the Organization did not remit the excess residual receipts to HUD’s Accounting Center nor obtain HUD approval for retention or alternative use. The overage that was not submitted amounted to $255,280. Context: The Organization had excess residual receipts that were not remitted at renewal. Cause: There is a lack of a formal compliance control. Effect: Noncompliance with HUD PRAC residual receipts requirements, potentially resulting in improper retention of federal funds. Recommendation: We recommend that the Organization remit the overage of $255,280 to HUD’s Accounting Center or submit HUD 9250 for HUD approved application if directed. Views of management and planned corrective action: Management concurs and will submit form HUD 9250.
Finding 2025-002: Supportive Housing for Persons with Disabilities, Federal Assistance Listing Number 14.181 Criteria: HUD requires entities to accurately report occupancy and adjust monthly HUD vouchers to exclude units where tenants have vacated. HUD’s Tenant Rental Assistance Certification System (TRACS) guidance requires removal of subsidy for vacated units effective the day after move-out. Condition: During testing of HUD vouchers for the year ended June 30, 2025, we noted that the Organization continued to claim HUD subsidy for four units after tenants had vacated. In some cases, subsidy continued for four months beyond the move-out date. These amounts were adjusted once the vacated unit was reported to the finance department. Context: There were four move-outs during the year and this issue was identified in each move-out. Cause: The formal control related to reporting of move-outs was not followed. Effect: The Organization received funding in advance of services being provided. Recommendation: We recommend that new procedures be implemented to ensure move-outs are timely reported. Views of management and planned corrective action: Management concurs. We will implement a move-out notification workflow.