Audit 400791

FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT Department of Housing and Urban Development Finding 2025-001: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, was for a tenant who moved in during the year and management did not properly generate the EIV Existing Tenant Search report timely. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to generate the HUD EIV Existing Tenant Search for every applicant household member. EFFECT OF CONDITION The EIV Existing Tenant Search report was not maintained in the tenant file. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria and HUD lease requirements. Of the six files examined, one tenant was a new move in. The tenant’s file did not contain the EIV Existing Tenant Search report required by HUD. CAUSE OF CONDITION The procedures to ensure EIV Existing Tenant Search reports were properly filed in the tenant file were not followed. RECOMMENDATION The auditor recommends ensuring all current and new staff are trained on HUD Handbook requirements for tenant files, including the EIV Existing Tenant Search reports. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be continuing to train staff on the HUD Handbook requirements for tenant files.

FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT (CONTINUED) Department of Housing and Urban Development Finding 2025-002: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION Two tenant files, out of six files reviewed, had incorrectly accounted for tenant’s income, which resulted in overcharging one tenant $45 a month in rent and undercharging one tenant $9 a month in rent. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to properly calculate tenants rent derived from the appropriate documents on file for tenants. EFFECT OF CONDITION One tenant was improperly overcharged $540 of rent and HUD was undercharged $540 of additional rental assistance payments for the year ended December 31, 2025. One tenant was improperly undercharged $99 of rent and HUD was overcharged $99 of additional rental assistance payments for the year ended December 31, 2025. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample, were examined for compliance with tenant eligibility criteria. Of the six files examined, income for two tenants was incorrectly accounted for, resulting in the wrong calculation of tenant rent and HUD tenant assistance payments. CAUSE OF CONDITION Management mistakenly did not ensure the proper income was used to calculate the tenant’s rent. RECOMMENDATION The auditor recommends ensuring all tenants’ paperwork is thoroughly reviewed and accurately used in the calculation of the tenant’s required monthly rent and HUD’s tenant assistance payments. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project billed HUD for the $540 of tenant assistance and will be reimbursing the tenant for the additional rent of $540. The Project will be billing the tenant for the $99 and reimbursing HUD for the additional tenant assistance of $99.

FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT (CONTINUED) Department of Housing and Urban Development Finding 2025-003: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION One tenant file, out of six files reviewed, did not include verification detail for one asset included in the certification. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to verify asset values at the time of certification. EFFECT OF CONDITION One tenant’s certification did not include verification of one of the asset values. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria. Of the six files examined, an asset value for one tenant was not properly verified and documented in the tenant file. CAUSE OF CONDITION Management mistakenly did not ensure the asset verification documentation was included in the tenant file. RECOMMENDATION The auditor recommends ensuring all tenants’ assets are verified at the time of certification and documentation is maintained in the tenants’ file. Also, the tenant file noted above is certified to determine if the proper tenant rent and HUD assistance payment were accurately calculated for the year ended December 31, 2025. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be continuing to train staff on the HUD Handbook requirements for tenant files.