Audit 402757

Finding 2025-002: Compliance finding Information on universe: Total population was 43 units. Sample Size: Five files were selected for testing. Identification of repeat finding: Yes, 2024-003 Condition: Several tenants were not recertified in accordance with HUD guidelines. Criteria: All tenants must be recertified annually. Tenants must provide all income information at recertification, tenants must pay 30% of their adjusted income as the tenant portion of rent. Effect: HUD subsidy may be inaccurate. Context: Auditor selected tenant files and discussed with the management agent that due to understaffing, there were difficulties in obtaining the appropriate documentation and therefore completing and correcting accurate 50059 forms. Cause: Lack of oversight by management agent. Recommendation: Continue to hire and train additional staff to fill the staffing shortages.

Finding 2025-003: Significant deficiency for compliance and financial reporting Information on universe: Payroll control testing. Sample size: Five employees selected for internal control testing. Identification of repeat finding: Yes, 2024-005 Condition: Lack of adequate review of time allocation sheets to prevent errors in payroll allocations being charged to the property. Criteria: Time sheets and allocation sheets should be adequately reviewed to ensure 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 2025-004: Compliance finding and material weakness 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, 2024-007 Condition: All management agent duties should be performed timely. Criteria: Tenant units should be filled in a timely manner; existing tenants need to be recertified annually, proper reviews should be performed. Effect: There were significant vacancies and some tenant’s subsidies had expired and had yet to be corrected. Context: Auditor noted the vacancies and file 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 until they are fully staffed.