Audit 402751

Finding 2025-004: Material weakness and compliance finding Information on universe/ sample size: It was noted during testing that the management agent was not able to perform management duties in a timely manner. Identification of repeat finding: Yes, 2024-005 Condition: All management agent duties should be performed timely. Criteria: Tenant units should be filled in a timely manner and existing tenants need to be recertified annually. Effect: There were unresolved corrections and there were tenants’ subsidies that had expired and had yet to be recertified, additionally, there were vacant units for extended periods of time. Context: Auditor noted the issues during testing. Cause: Turnover at the management agent. Recommendation: The management agent should hire a consultant to assist with performing the necessary management agent duties when they are not adequately staffed.

Finding 2025-003: Significant deficiency for compliance and financial reporting Information on universe: Payroll allocation testing Sample size: Three employees selected for internal control testing. Identification of repeat finding: Yes, 2024-007 Condition: Lack of adequate review of time allocation sheets to prevent errors in payroll allocations being charged to the property. Criteria: Allocation sheets should be reviewed for accuracy and completeness Effect: Potential for improper allocations being charged to the property. Context: Auditor selected timesheets and allocation sheets for payroll testing. There were errors on the allocation sheets as well as the wrong sheet being used due to late submission. Cause: Lack of adequate and timely review of allocation sheets resulting in the allocation sheets not accurately reflecting what was charged to the property. Recommendation: Sufficient and timely review of allocation sheets should be performed to prevent errors between what is allocated and what is charged to the property.

Finding 2025-005: Compliance and significant deficiency for major program and significant deficiency for financial reporting Information on universe/ sample size: It was noted during testing that the property inadvertently paid for expenses that were related to another entity. Identification of repeat finding: Not a repeat finding. Condition: Non-entity related expenses paid for by the property. Although detected and corrected, it was not within a timely manner and resulted in a receivable at year end. Questioned costs: $5,752 Criteria: Project funds are to be used for expenses of the property. Effect: Cash balances are reduced for an expense that does not belong to the Organization and not paid back in a timely manner. Context: A receivable was recorded to reflect the amount due from a related party for an expense inadvertently paid by the Organization. Although this was caught it was not caught in a timely manner as the expense was paid 8 months prior to year end and the receivable was not recorded until year end. Cause: Lack of adequate and timely review. Recommendation: Revisit processes and procedures to ensure that controls are operating effectively to capture errors in an appropriate and timely manner.

Finding 2025-002: Compliance finding Information on universe: Total population was 38 files. Sample Size: 6 files were selected for testing. Identification of repeat finding: Yes, 2024-003 Condition: Additional file had to be selected due to one of the files missing the recertification paperwork including a signed 50059. Criteria: All tenants must be recertified annually. Effect: Auditor was unable to test the income and expenses on one file. Context: Auditor selected tenant files and was unable to test one of the files resulting in an additional file needing to be tested. Cause: Turnover at the management agent. Recommendation: Continue to hire and train additional staff to fill the staffing shortages.