Audit 403209

2025-001 – Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program: 14.195 Section 8 Project-Based Cluster Condition: As part of our testing of Warren Gardens Housing Cooperative Company, Inc.’s, (the Cooperative) internal control over compliance for eligibility, we noted that the Cooperative did not follow their internal controls regarding income recalculations for two out of thirty-seven applications reviewed. The issues did not result in disqualification of the individuals to receive benefits, however these issues did impact the participants’ amount of benefits being provided. Criteria: 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Cause: The Cooperative did not properly follow its internal controls. Effect: The Cooperative did not properly calculate the income level for two participants in accordance with its internal controls. Context: Two out of thirty-seven applications sampled. Our sample was not a statistically valid sample. This was not a repeat finding from a prior period. Questioned Costs: None. Recommendations: Management should ensure that the Cooperative’s internal controls in place are properly followed. Management Response: Management acknowledges the finding and has updated and corrected the tenant files. Moving forward, management will strengthen procedures over tenant documents and income calculations.