Audit 400931

Finding No. 2025-001 - E - Eligibility for Uniform Guidance - Significant Deficiency Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities Assistance Listing Number: 14.181 Federal Award Identification Number and Year: 126HD018, program year is 2025. 126-HDO18-CMI,program year is 1997. Name of Pass-through Entity (if applicable): Not Applicable Criteria: Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition: In connection with our lease file review, we noted that: -two out of two tenants' recertifications were not performed timely. -two out of three tenants tested did not have income verified through the HUD Enterprise Income Verification ("EIV"). Cause: Management's policies with respect to recertifications 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: N/A Context: Two out of two tenants' recertifications were not performed timely. Two out three tenants tested did not have EIV performed. Auditor Noncompliance Code: Z-Other for REAC filing Identification as a Repeat Finding: Yes; 2024-001 Recommendation: Management should establish procedures and monitor compliance with those procedures to insure that recertifications are performed timely and signed, 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. Findings Resolution Status: Not resolved Views of Responsible Officials and Planned Corrective Action: REACH has policies in place to complete certifications and EIVs in a timely manner but due to staffing shortages at the property continued to have issues with timely completion of income certifications in 2025. In 2026 property management will be outsourced to a third party management company to address outstanding compliance issues.

Finding No. 2025-002 - B - Allowable Costs for Uniform Guidance - Significant Deficiency Name of Federal Agency: Department of Housing and Urban Development Federal Program Name: Supportive Housing for Persons with Disabilities Assistance Listing Number: 14.181 Federal Award Identification Number and Year: 126HD018, program year is 2025. 126-HDO18-CMI,program year is 1997. Name of Pass-through Entity (if applicable): Not Applicable Criteria: Monthly Housing Owner’s Certification and Application for Housing Assistance Payments requests on form HUD-52670 are limited to amounts due for current residents. Move out tenants need to be removed from voucher process in reasonable period of time and an adjustment made back to HUD on HUD-52670-A Adjustments to Schedule of Tenant Assistance Payments Due against any amounts applied for and collected after move-out. Condition: During our testing of cash receipts, we noted that one tenant continued to appear on the HUD-52670 for at least six months after they moved out on July 1, 2025 and no HUD-52670-A was filed for this tenant in 2025. Cause: Management did not monitor the monthly form HUD-52670 and HUD-52670-A for proper inclusion and exclusion of tenants. Effect or Potential Effect: HUD voucher payments were over billed and over collected for at least six months through December 31, 2025 for one tenant tested in 2025. Questioned Costs: N/A Context: One month of cash receipts transactions, out of two tested, included an amount for one tenant that moved out but still appeared on the HUD-52670. Auditor Noncompliance Code: Z-Other for REAC filing Identification as a Repeat Finding: No Recommendation: Management should review the HUD-52670 and HUD-52670-A every month to ensure that it contains the correct tenants and amounts requested. Findings Resolution Status: Not resolved Views of Responsible Officials and Planned Corrective Action: REACH has policies in place to ensure that HAP funds received are only for current tenants. Due to staffing issues there was a delay in updating the HAP contract. All excess funds received will be returned to HUD.