FAC Explorer

Audit 399436

FY End
2025-12-31
Total Expended
$12.03M
Findings
2
Programs
2
Organization: Victory Heights, Inc. (MD)
Year: 2025 Accepted: 2026-04-22
Auditor: COHNREZNICK LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1208457 2025-001 Material Weakness Yes E
1208458 2025-001 Material Weakness Yes E

Programs

ALN Program Spent Major Findings
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $7.78M Yes 1
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $4.25M Yes 1

Contacts

Name Title Type
PMHJDK326KS7 Sarah O'Rielly Auditee
3014936000 Russell Phillips Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards ("Schedule') includes the federal award activity of Victory Heights, Inc., HUD Project No.: 000-EEE058, under programs of the federal government for the year then ended December 31 , 2025. 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 Heights, Inc., it is not intended to and does not present the financial position, changes in net assets, or cash flows of Victory Heights, Inc. For the year ended December 31, 2025, 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 0MB 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.
Victory Heights, Inc. has elected not to use the de minimis indirect cost rate allowed under the Uniform Guidance.
The balance shown on the schedule of expenditures of federal awards relating to the capital advance includes $7,158,700 expended in prior periods. Section 202 capital advances need not be repaid as long as the owner continues to make the housing available to the low-income elderly for at least 40 years.
Victory Heights, Inc. has received two loans from the District of Columbia DHCD for $500,000 and $3,750,000. The loan balance outstanding at the beginning of the year is included in the federal expenditures presented in the Schedule. See Notes for table.

Finding Details

Finding 2025-001
Criteria 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: 4 out of 13 tenants tested did not utilize the Enterprise Income Verification (EIV) system. 5 out of 13 tenants tested did not complete the Form 50059 timely. 1 out of 13 tenants tested did not have the tenant and subsidy rent portions calculated correctly. Cause Management’s policies with respect to the determination of tenant security deposits and 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 None Context A sample of 13 tenant files from a population of 73 were selected. We identified exceptions in 7 out of the 13 files tested. The sample is not a statistically valid sample. Identification as a Repeat Finding Repeat finding of prior year finding 2024-002 Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, 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 Management compliance is addressing the generating of EIV reports to align with verification dates (<120 days) rather than when annual recertification notices are generated/sent (at least 120 days). Delays in recertification completion have improved; a majority of the certifications reviewed were effective within first 6 months of transition while the site was still adjusting to new software and management. Additional training has been provided to emphasize the importance of timely reporting and completion. There has also been a change in site staff.