Audit 409797

Criteria The Uniform Guidance requires that all entities that expend in excess of $750,000 to file audited financial statements and Data Collection Form within 9 months of year-end. (2 CFR Section 200.512). Entities are required to submit timely GAAP-based audited financial information to HUD’s Financial Assessment Subsystem within 90 days of year end. (24 CFR Section 5.801(c)(2) and HUD Handbook 4065.1 REV-1, paragraph 2-1 (D)(1)(b)). Condition The Project’s December 31, 2024 audited financial statements were not filed with the Federal Audit Clearinghouse within nine months of year-end. The audited financial statements were not reported to HUD’s Financial Assessment Subsystem within 90 days of year end. Cause Turnover in staffing and lack of oversight led to information not being ready for audit in a timely manner. Questioned Costs Not Applicable. Context We reviewed all report submissions for compliance and internal controls. Effect The Project could have had federal funding delayed or reduced. Repeat Finding This is not a repeat finding. Recommendation We recommend the Project review its internal control policies and procedures to ensure timely reporting. Response The Project agrees with the finding and will implement controls to ensure timely reporting for future submissions.

Criteria The Project is responsible for establishing and maintaining effective internal controls to ensure tenant files are complete, accurate, and maintained in accordance with applicable program requirements. Effective internal controls include periodic monitoring and supervisory review of tenant files. Condition During our testing, we noted that the Project did not have documentation to show they performed periodic reviews of tenant files throughout the year. Cause Turnover in staffing and lack of oversight led to no documentation of periodic reviews. Questioned Costs Not Applicable. Context No files were reviewed. Effect Without documentation of periodic tenant file reviews, the Project cannot demonstrate that adequate monitoring of controls are operating effectively and could lead to errors being made and not caught timely. Repeat Finding This is not a repeat finding. Recommendation We recommend the Project implement formal procedures requiring documentation evidencing the completion of periodic reviews be maintained. Response The Project agrees with the finding and will implement controls to ensure proper documentation of periodic reviews of tenant files.

Criteria The Project is responsible for establishing and maintaining effective internal controls to ensure eligible applicants be selected from the waiting list in accordance with established preferences and the chronological order of application, unless a documented exception is permitted. The Project is responsible for maintaining effective internal controls to ensure applicants are selected and admitted in compliance with HUD requirements and its approved Administrative Plan. Condition During our testing of tenant admissions, we noted that applicants were admitted to the Project without being selected in accordance with the approved waiting list. Cause Turnover in staffing and lack of oversight led to internal controls not being followed in compliance with waiting list requirements. Questioned Costs Not Applicable. Effect The Project cannot demonstrate that housing opportunities were offered fairly and consistently to eligible applicants. Failure to follow waiting list procedures increases the risk of noncompliance with HUD requirements and may result in eligible applicants being improperly bypassed. Context We noted 2 of 5 tenants selected from the continuously rolling waiting list were selected in the wrong order. In reviewing the remainder of the waiting list, we noted other applicants were offered out of order as well. Repeat Finding This is not a repeat finding. Recommendation We recommend the Project implement supervisory review procedures over tenant admissions, require documentation of all waiting list exceptions, and periodically monitor compliance with waiting list selection procedures. Response The Project agrees with the finding and will implement controls to ensure proper selection from the waiting list.