Audit 415131

Finding 2026-001: Supportive Elderly Housing Section 202 Condition: The Corporation fell short on the replacement reserve and mortgage escrow monthly payments. Criteria: The Corporation is required to have 12 monthly payments funded into the replacement reserve and mortgage escrow account. For the replacement reserve account, there was a shortfall of $661 that was missing for the year ended June 30, 2026. Payments are an ongoing obligation, unless waived by HUD. Cause: Poor cash flow from the Corporation does not always allow all bills to be paid in a timely manner. Effect: The Corporation is not in compliance with the provisions of the Regulatory agreement. Recommendation: In periods of high repair expenditures, prompt submission of replacement reserve reimbursement claims will help replenish operating funds. This will enhance the Corporation’s ability to meet its monthly replacement reserve and other obligations. Views of Responsible Officials and Planned Corrective Actions: Corrective action will be implemented immediately with more thorough oversight over monthly replacement reserve and escrow disbursements.

Finding 2026-002: Supportive Elderly Housing Section 202 Condition: During our review of the vacancy report and tenant rent roll, we noted that one unit, 232, remains vacant from the prior fiscal year through the current fiscal year. The unit has not been rented as of year-end. Criteria: Management is responsible for maintaining the property in a manner that promotes maximum occupancy and ensures that vacant units are made available for occupancy within a reasonable period of time, consistent with applicable program requirements and the property’s policies and procedures. Cause: Management did not provide adequate oversight of the vacant unit to ensure timely action was taken to re-rent the unit. Effect: The continued vacancy resulted in lost rental revenue and reduced occupancy at the property. Recommendation: Management should continue efforts to rent the vacant unit and evaluate the reason for the extended vacancy. Management should also monitor vacant units on a regular basis to ensure that appropriate actions are taken to maximize extended vacancies and the related loss of revenue. Views of Responsible Officials and Planned Corrective Actions: Corrective action will be implemented immediately with Management having a more thorough oversight over vacant units on an ongoing basis to minimize extended vacancies.

Finding 2026-003: Supportive Elderly Housing Section 202 Condition: One out of the five tenant files tested had the following items missing: social security card and unit inspection. In addition, the security deposit on the lease does not agree with the rent roll. Criteria: Tenant files should be maintained with all required documentation. Cause: The Corporation does not have internal controls in place to ensure that tenant files are properly maintained. Effect: The Corporation is no longer in compliance with its Project Rental Assistance Contract. Recommendation: The Corporation should design and implement internal controls to ensure that all tenant files have proper documentation Views of Responsible Officials and Planned Corrective Actions: Management is in agreement with the auditor’s findings. Management will ensure tenant file inspections are completed on an annual basis