Finding 2025-001 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Federal program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Eligibility Criteria: In accordance with Afiya Apartments, Inc.’s regulatory agreement with HUD for its HUD Section 811 Capital Advance and HUD Section 811 Project Rental Assistance Contract (PRAC), Afiya Apartments, Inc. is required to reexamine family income and composition at least once every 12 months and adjust the total rent payment and housing assistance payment, as necessary, based on the recertification. Condition: Afiya Apartments, Inc. did not perform recertifications for all tenants within the timeframe specified by HUD. We noted significant delays in tenant recertification procedures. Cause: There were not properly designed or implemented internal controls to ensure the tenant recertifications were performed in the timeframe required by HUD. Effect: The effect is material non-compliance with the terms of the HUD program listed above. Questioned Costs: None. Repeat Finding: Yes, see Finding 2024-001. Context: We noted from review of the Forms HUD-52670 Schedule of Tenant Assistance Payments Due and other client prepared schedules, several tenants had not been recertified at least once every 12 months as required. We selected a sample of 6 tenants from a population of 16 for eligibility testing. For those 6 tenants, there was a total of 11 recertifications completed during the fiscal year ended June 30, 2025, of which 7 were completed after the required HUD timeframe. In several cases, the completion date of the recertifications was several months after the effective date. The sample was not a statistically valid sample. Recommendation: We recommend management review the current internal control procedures and implement additional procedures to ensure annual recertifications are performed as required by HUD. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.