Federal expenditures reported as capital advance represent the December 31, 2023 balance of a capital advance which was received in prior periods. The grantor imposes continuing compliance requirements. The balance is unchanged at December 31, 2024.
2024-001 - Income Certifications Federal Program - U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 - Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding - Eligibility Criteria - The Compliance Supplement requires Owners inform tenants, through written notices, about the tenants’ responsibility to provide information necessary to complete annual recertifications. Owners must conduct a recertification of family income and composition at least annually. Owners must then recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. Condition - Annual recertifications of family income and composition were not completed and/or were not completed timely. Context - Of the total population of 47 units, 5 were tested. Two units selected for testing at this property resulted in noncompliance. Based on our sample, inquiry of employees and a master list of late annual recertifications provided by management, we understand the finding to be prevalent at the Corporation throughout the year. Cause - Inexperienced site employees and changes in procedures for processing tenant files which resulted in numerous failures to timely complete the required annual recertifications. The Corporation has changed management companies to assist in this matter. Effect - The Corporation was not in compliance with the Compliance Supplement. In addition, rental assistance may be delayed and changes in rental assistance will be effective from the tenants’ annual recertification dates. Any changes in the tenant portion of rent may not take effect until the annual recertifications are complete and may result in a loss of rent. Identification of repeat finding - Yes Recommendation - Site managers should receive additional training and be reminded of the procedures in place to ensure that annual recertifications are completed timely. In addition, procedures should be put in place to ensure recertifications continue to be completed when site staff turns over at properties. Management should continue to monitor site staffing and ensure procedures are in-place as back up for site staffing shortages. Views of responsible officials and planned corrective actions - The Corporation agrees with the finding. The Corporation has changed management agent to Tapestry which has a compliance department to assist site staff in completing tenant recertifications.
2024-002 - Replacement Reserve Federal Program - U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 - Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding - Special Tests and Provisions Criteria - The Regulatory Agreement requires that 12 monthly deposits be made to the replacement reserve. Condition - The Corporation did not make the monthly required deposits from September through December 2024. Context - The Corporation made 8 out of 12 monthly deposits. Cause - The change in management agent in September 2024 caused the delinquent deposits. Effect - The replacement reserve account was not adequately funded at year end, and the Corporation was not in compliance with the Regulatory Agreement. Identification of repeat finding - No Recommendation - The Corporation should make a deposit in the amount of $11,680 to adequately fund the replacement reserve. View of responsible officials and planned corrective actions - The Corporation agrees with the finding. The Corporation changed the management agent to Tapestry and a deposit of $11,680 was made on January 9, 2025 to properly fund the replacement reserve.
2024-003 - Cash Disbursements Federal Program - U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 - Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding - Cash Management Criteria - The HUD audit guide requires that all disbursements from the regular operating account must be supported by approved invoices, bills, or other supporting documentation and be in the name of the Project. Condition - The Corporation made several payments without having proper documentation and also made one payment not in the name of the Project. Context - Of the total population of 12 months of disbursements, 40 were tested. One invoice was not in the name of the Project and 3 disbursements did not have proper documentation for the payment. Based on our sample, inquiry of employees, we understand the finding to be prevalent at the Corporation throughout the year. Cause - The previous management agent chose to pay the invoices without proper documentation. Effect - We are unable to determine if the expenditures are in compliance with the Regulatory Agreement and also the Corporation had $128 less of operating cash due to paying an invoice not the Project’s name. Identification of repeat finding - No Recommendation - The Corporation should only make disbursements when there is proper documentation supporting the disbursement. View of responsible officials and planned corrective actions - The Corporation agrees with the finding and believes the new management agent has the procedures and controls in place to detect and prevent a similar finding to occur in the future. 2023-001 - Income Certifications Federal Program - U.S. Department of Housing and Urban Development Assistance Listing Number 14.157 - Supportive Housing for the Elderly (Section 202) Material Weakness & Noncompliance Category of Finding - Eligibility Condition - Annual recertifications of family income and composition were not completed and/or were not completed timely. Recommendation - Site managers should receive additional training and be reminded of the procedures in place to ensure that annual recertifications are completed timely. In addition, procedures should be put in place to ensure recertifications continue to be completed when site staff turns over at properties. Management should continue to monitor site staffing and ensure procedures are in-place as back up for site staffing shortages. Status - Not corrected. Repeat finding in 2024