Department of Housing and Urban Development Finding No. 2022-001; Section 811, CFDA 14.181 Statement of Condition During the year ended June 30, 2022, management withdrew $120,406 from the replacement reserve without HUD approval. Criteria Any withdrawal from the replacement reserve required HUD approval. Questioned Costs None Effect The withdrawal of $120,406 is an unauthorized withdrawal from the replacement reserve. Cause Money was inappropriately transferred from replacement reserve account. Recommendation Management has refunded the money, management should put a system in place to avoid such withdrawals in the future. Auditor Noncompliance Code: H - unauthorized distribution of project assets Finding resolution status: Cleared. View of responsible officials and planned corrective actions Management has refunded the money and have implemented protocols to avoid withdraws without prior HUD approval.
Finding No. 2022-002; Section 811, CFDA 14.181 Statement of Condition In connection with the procedures applied to a sample of 4 lease files we noted the following deficiencies: ? 3 instances where the file did not contain the appropriate Enterprise Income Verification system documentation. ? 2 instances where the tenant recertification was signed off but not dated by the tenant. ? 4 instances where the tenant recertification was not signed off by management. ? 1 instance where the file did not contain the tenant application, proof of citizenship or background check. ? 1 instance where the HUD-50059 contained a security deposit of $240 however there was no security deposit in the security deposit payable listing. Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Questioned Costs None Effect The procedures for determining tenant security deposits and 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 or tenant being charged incorrect amount of rent. Cause Management's policies with respect to 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, and tenants income may be over/under reported. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that tenant security deposits are correctly recorded, 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. Auditor Noncompliance Code: R - Section 8 Program Administration Finding Resolution Status: In process. Views of Responsible Officials and Planned Corrective Actions The Harlem United management team has established a new policy to ensure compliance of tenant lease files. Specifically, when intake staff receive a referral from the NYC HIV/AIDS Services Administration (HASA), an interview will take place to determine if the individual fits the program criteria (including documentation of their income, medical status, psychosocial assessment and/or psychiatric evaluation and proof of citizenship). If the individual fits the criteria and accepts an efficiency unit at North General / Foundation House East, the person?s documentation will be forwarded to our consultant, P & L Management, to verify the income and complete all leasing documentation for HUD approval (background checks and security deposits are not required of this program). Upon completion of the HUD documentation process, the intake staff will check to verify that all documentation have been signed and dated by the appropriate persons which includes P & L Management and North staff, and the tenant. Annually, the income information of all tenants at North General will be sent to P & L Management for verification; if the tenant?s income status continues to meet the HUD guidelines, the updated documentation will be forwarded back to the staff at North General. If the tenant?s income status does not meet the HUD criteria, the individual?s income information will be forwarded to NYC HASA for alternate housing placement. In addition, the Managing Director of North General will perform quarterly mock audits to ensure that tenant lease files are in compliance.
Department of Housing and Urban Development Finding No. 2022-003; Section 811, CFDA 14.181 Statement of Condition Management failed to maintain the property in good repair and received a score of 20c in its December 8, 2021 REAC Physical inspection. Criteria In accordance with the regulatory agreement, management is required to maintain the property in good repair. Questioned Costs None Effect The Project was unable to obtain a passing score on its REAC inspection. Cause The procedures to ensure compliance with HUD regulations regarding physical condition of the property were not followed. Recommendation Management should correct all findings noted in the REAC Physical Inspection Report in the time frames requested in the physical inspection. Auditor Noncompliance Code: I - Failure to maintain property/open physical inspection. Finding Resolution Status: Cleared. Views of Responsible Officials and Planned Corrective Actions The December 2021 REAC inspection found multiple deficiencies at North General / Foundation House East. Seven Health and Safety violations were identified and resolved within 72 hours. In addition, all smaller repairs were made within two weeks following the inspection. Several major capital repairs were also cited in the REAC inspection, particularly the roof, the facade, windows and trash compactor. These repairs are extensive and required additional funding. In the months following the REAC inspection, Harlem United senior management prioritized identifying new funding specifically for major capital projects in supportive housing buildings. Additional funding was granted by HUD and became available to North General / Foundation House East in spring 2022, and soon after bids were obtained from vendors. Repairs to the roof, facade, windows and compactor are scheduled to begin in July 2023. In addition, facility staff work with program staff to identify and address minor repairs in tenants? units and in common areas on an ongoing basis
Department of Housing and Urban Development Finding No. 2022-001; Section 811, CFDA 14.181 Statement of Condition During the year ended June 30, 2022, management withdrew $120,406 from the replacement reserve without HUD approval. Criteria Any withdrawal from the replacement reserve required HUD approval. Questioned Costs None Effect The withdrawal of $120,406 is an unauthorized withdrawal from the replacement reserve. Cause Money was inappropriately transferred from replacement reserve account. Recommendation Management has refunded the money, management should put a system in place to avoid such withdrawals in the future. Auditor Noncompliance Code: H - unauthorized distribution of project assets Finding resolution status: Cleared. View of responsible officials and planned corrective actions Management has refunded the money and have implemented protocols to avoid withdraws without prior HUD approval.
Finding No. 2022-002; Section 811, CFDA 14.181 Statement of Condition In connection with the procedures applied to a sample of 4 lease files we noted the following deficiencies: ? 3 instances where the file did not contain the appropriate Enterprise Income Verification system documentation. ? 2 instances where the tenant recertification was signed off but not dated by the tenant. ? 4 instances where the tenant recertification was not signed off by management. ? 1 instance where the file did not contain the tenant application, proof of citizenship or background check. ? 1 instance where the HUD-50059 contained a security deposit of $240 however there was no security deposit in the security deposit payable listing. Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Questioned Costs None Effect The procedures for determining tenant security deposits and 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 or tenant being charged incorrect amount of rent. Cause Management's policies with respect to 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, and tenants income may be over/under reported. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that tenant security deposits are correctly recorded, 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. Auditor Noncompliance Code: R - Section 8 Program Administration Finding Resolution Status: In process. Views of Responsible Officials and Planned Corrective Actions The Harlem United management team has established a new policy to ensure compliance of tenant lease files. Specifically, when intake staff receive a referral from the NYC HIV/AIDS Services Administration (HASA), an interview will take place to determine if the individual fits the program criteria (including documentation of their income, medical status, psychosocial assessment and/or psychiatric evaluation and proof of citizenship). If the individual fits the criteria and accepts an efficiency unit at North General / Foundation House East, the person?s documentation will be forwarded to our consultant, P & L Management, to verify the income and complete all leasing documentation for HUD approval (background checks and security deposits are not required of this program). Upon completion of the HUD documentation process, the intake staff will check to verify that all documentation have been signed and dated by the appropriate persons which includes P & L Management and North staff, and the tenant. Annually, the income information of all tenants at North General will be sent to P & L Management for verification; if the tenant?s income status continues to meet the HUD guidelines, the updated documentation will be forwarded back to the staff at North General. If the tenant?s income status does not meet the HUD criteria, the individual?s income information will be forwarded to NYC HASA for alternate housing placement. In addition, the Managing Director of North General will perform quarterly mock audits to ensure that tenant lease files are in compliance.
Department of Housing and Urban Development Finding No. 2022-003; Section 811, CFDA 14.181 Statement of Condition Management failed to maintain the property in good repair and received a score of 20c in its December 8, 2021 REAC Physical inspection. Criteria In accordance with the regulatory agreement, management is required to maintain the property in good repair. Questioned Costs None Effect The Project was unable to obtain a passing score on its REAC inspection. Cause The procedures to ensure compliance with HUD regulations regarding physical condition of the property were not followed. Recommendation Management should correct all findings noted in the REAC Physical Inspection Report in the time frames requested in the physical inspection. Auditor Noncompliance Code: I - Failure to maintain property/open physical inspection. Finding Resolution Status: Cleared. Views of Responsible Officials and Planned Corrective Actions The December 2021 REAC inspection found multiple deficiencies at North General / Foundation House East. Seven Health and Safety violations were identified and resolved within 72 hours. In addition, all smaller repairs were made within two weeks following the inspection. Several major capital repairs were also cited in the REAC inspection, particularly the roof, the facade, windows and trash compactor. These repairs are extensive and required additional funding. In the months following the REAC inspection, Harlem United senior management prioritized identifying new funding specifically for major capital projects in supportive housing buildings. Additional funding was granted by HUD and became available to North General / Foundation House East in spring 2022, and soon after bids were obtained from vendors. Repairs to the roof, facade, windows and compactor are scheduled to begin in July 2023. In addition, facility staff work with program staff to identify and address minor repairs in tenants? units and in common areas on an ongoing basis