Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-001: Section 8 Housing Assistance Payments Program, CFDA: 14.195 ? Waters at Augusta, L.P. Condition: The Partnership failed to set up and submit the monthly Housing Assistance Payments Program vouchers for payment in a timely manner resulting in five months of subsidy rental income not received. Criteria: The Partnership is required to submit monthly vouchers for payment of rental assistance. Questioned Costs: $666,659 Effect: The Partnership is in violation of the Section 8 Housing Assistance Payments Program. Cause: HUD experienced complications setting up the System for Award Management (SAM) number. The partnership filled out the application accurately but when HUD processed the SAM number, it incorrectly contained information for Waters at Ribaut which took several months for HUD to resolve internally. There were additional delays incurred in HUD implementing the correct depository bank account information. Recommendation: We recommend the Partnership submit the missing vouchers for payment. Management?s Views: Management is in agreement with the finding and will submit the remaining vouchers. Auditors comment: Partially Cleared. The Partnership has successfully set up and submitted the August, September, and October 2022 vouchers and received $391,023 in 2023 for all three months.
Finding #2022-003: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Partnership?s did not maintain current documents in the tenant files, including annual Tenant Income Certification forms and income verification documentation. Criteria: The Partnership?s are required to annually confirm eligibility and maintain documentation in the tenant file including a signed Tenant Income Certification form and income verification documents. Questioned Costs: Unknown Effect: The Partnership?s are in violation of regulatory requirements governing tenant files and eligibility verification, which could result in the loss of HUD subsidies. Cause: Management?s policies with respect to tenant eligibility and tenant files were not consistently followed. Recommendation: Management should review its tenant eligibility policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-006: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 Condition: In December 2022, the Partnership made related party repayments of $60,677. Cash available for distribution June 30, 2022 and December 31, 2021 was $-0-. The Partnership made payments in excess of surplus cash of $60,677. Criteria: The HUD Regulatory Agreement requires the Partnership to calculate surplus cash at mid-year and year-end to determine the amount of surplus cash available for distribution. Questioned Costs: $60,677 Effect: The Partnership is in violation of HUD regulatory requirements governing surplus cash distributions. Cause: The timing of surplus cash. Recommendation: Management should review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement. Management?s Views: Management is in agreement with the finding. Auditors comment: CLEARED. Although distributions were made prior to year-end, repayment is not necessary as the Partnership had sufficient surplus cash at December 31, 2022.
Finding #2022-003: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Partnership?s did not maintain current documents in the tenant files, including annual Tenant Income Certification forms and income verification documentation. Criteria: The Partnership?s are required to annually confirm eligibility and maintain documentation in the tenant file including a signed Tenant Income Certification form and income verification documents. Questioned Costs: Unknown Effect: The Partnership?s are in violation of regulatory requirements governing tenant files and eligibility verification, which could result in the loss of HUD subsidies. Cause: Management?s policies with respect to tenant eligibility and tenant files were not consistently followed. Recommendation: Management should review its tenant eligibility policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.
Finding #2022-002: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: During the year ended December 31, 2022, the City of Lynchburg, Virginia Fire Department deemed Building 28 uninhabitable on September 11, 2022 due to health and safety concerns involving the electrical, water and sewage lines. The Project initiated the termination of leases of the affected units and a judge issued a temporary injunction to stop them. Criteria: The Partnership is required to provide decent, safe and sanitary units in accordance with statutory requirements with HUD regulations. Questioned Costs: Unknown. Effect: The Partnership was in violation of HUD regulatory requirements requiring the Partnership to provide decent, safe and sanitary units. Cause: Failure to maintain decent, safe and sanitary conditions could result in the loss of tenant subsidies. Recommendation: Management should review and enhance procedures and monitoring related to the condition of the property and all units. Management?s Views: Management concurs and agreed to provide temporary housing for the affected tenants. Auditors comment: CLEARED. The City of Lynchburg conducted a follow-up inspection and deemed six units habitable. The Partnership is in the process of recertifying the affected tenants with HUD. Tenants are being placed in rehabilitated units as they become available.
Finding #2022-003: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Partnership?s did not maintain current documents in the tenant files, including annual Tenant Income Certification forms and income verification documentation. Criteria: The Partnership?s are required to annually confirm eligibility and maintain documentation in the tenant file including a signed Tenant Income Certification form and income verification documents. Questioned Costs: Unknown Effect: The Partnership?s are in violation of regulatory requirements governing tenant files and eligibility verification, which could result in the loss of HUD subsidies. Cause: Management?s policies with respect to tenant eligibility and tenant files were not consistently followed. Recommendation: Management should review its tenant eligibility policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-004: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Projects do not have a process in place to void uncashed utility reimbursement checks and return funds to HUD on a timely basis. Criteria: The HAP contracts require the Projects to void the check and return the funds to HUD as an adjustment on the voucher. Effect: The Projects are in violation of their HAP contracts. Questioned Cost: $39,694 Cause: Oversight Recommendation: The Projects should review the compliance requirements and establish controls and procedures to properly account for the payment of the reimbursement to the tenant and the return of funds to HUD on tenant reimbursement checks not cashed. Auditor?s Comment: The Projects have plans to establish a process to track utility reimbursements. The Projects will remit $39,694 to HUD for utility reimbursement checks not cashed.
Finding #2022-001: Section 8 Housing Assistance Payments Program, CFDA: 14.195 ? Waters at Augusta, L.P. Condition: The Partnership failed to set up and submit the monthly Housing Assistance Payments Program vouchers for payment in a timely manner resulting in five months of subsidy rental income not received. Criteria: The Partnership is required to submit monthly vouchers for payment of rental assistance. Questioned Costs: $666,659 Effect: The Partnership is in violation of the Section 8 Housing Assistance Payments Program. Cause: HUD experienced complications setting up the System for Award Management (SAM) number. The partnership filled out the application accurately but when HUD processed the SAM number, it incorrectly contained information for Waters at Ribaut which took several months for HUD to resolve internally. There were additional delays incurred in HUD implementing the correct depository bank account information. Recommendation: We recommend the Partnership submit the missing vouchers for payment. Management?s Views: Management is in agreement with the finding and will submit the remaining vouchers. Auditors comment: Partially Cleared. The Partnership has successfully set up and submitted the August, September, and October 2022 vouchers and received $391,023 in 2023 for all three months.
Finding #2022-003: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Partnership?s did not maintain current documents in the tenant files, including annual Tenant Income Certification forms and income verification documentation. Criteria: The Partnership?s are required to annually confirm eligibility and maintain documentation in the tenant file including a signed Tenant Income Certification form and income verification documents. Questioned Costs: Unknown Effect: The Partnership?s are in violation of regulatory requirements governing tenant files and eligibility verification, which could result in the loss of HUD subsidies. Cause: Management?s policies with respect to tenant eligibility and tenant files were not consistently followed. Recommendation: Management should review its tenant eligibility policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.
Finding #2022-005: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 and Section 8 Housing Assistance Payments Program CDFA 14.195 Condition: The liability for several Projects security deposits exceeded the security deposit cash account at December 31, 2022. Criteria: The HUD regulatory agreement requires the Company to maintain the security deposit in a trust account separate from other funds in an amount which at all times equals or exceeds the outstanding security deposit obligation. Effect: The Projects are in violation of their HUD/HAP contracts. Questioned Cost: $9,897 Cause: Oversight Recommendation: We recommend the Company deposit all security deposits directly into the trust account for security deposits in an amount sufficient to cover the security deposit liability. Management Views: Management is in agreement with the finding and will deposit the deficient funds into the respective Projects security deposit accounts. Status: Cleared. The Projects have deposited a total of $9,897 into their respective security deposit accounts. The security deposit shortfall has been corrected.
Finding #2022-006: Section 221(d)(4) HUD Insured Loan, CFDA 14.135 Condition: In December 2022, the Partnership made related party repayments of $60,677. Cash available for distribution June 30, 2022 and December 31, 2021 was $-0-. The Partnership made payments in excess of surplus cash of $60,677. Criteria: The HUD Regulatory Agreement requires the Partnership to calculate surplus cash at mid-year and year-end to determine the amount of surplus cash available for distribution. Questioned Costs: $60,677 Effect: The Partnership is in violation of HUD regulatory requirements governing surplus cash distributions. Cause: The timing of surplus cash. Recommendation: Management should review the Regulatory Agreement to ensure they are familiar with all the terms of the agreement. Management?s Views: Management is in agreement with the finding. Auditors comment: CLEARED. Although distributions were made prior to year-end, repayment is not necessary as the Partnership had sufficient surplus cash at December 31, 2022.
Finding #2022-003: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Partnership?s did not maintain current documents in the tenant files, including annual Tenant Income Certification forms and income verification documentation. Criteria: The Partnership?s are required to annually confirm eligibility and maintain documentation in the tenant file including a signed Tenant Income Certification form and income verification documents. Questioned Costs: Unknown Effect: The Partnership?s are in violation of regulatory requirements governing tenant files and eligibility verification, which could result in the loss of HUD subsidies. Cause: Management?s policies with respect to tenant eligibility and tenant files were not consistently followed. Recommendation: Management should review its tenant eligibility policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.
Finding #2022-002: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: During the year ended December 31, 2022, the City of Lynchburg, Virginia Fire Department deemed Building 28 uninhabitable on September 11, 2022 due to health and safety concerns involving the electrical, water and sewage lines. The Project initiated the termination of leases of the affected units and a judge issued a temporary injunction to stop them. Criteria: The Partnership is required to provide decent, safe and sanitary units in accordance with statutory requirements with HUD regulations. Questioned Costs: Unknown. Effect: The Partnership was in violation of HUD regulatory requirements requiring the Partnership to provide decent, safe and sanitary units. Cause: Failure to maintain decent, safe and sanitary conditions could result in the loss of tenant subsidies. Recommendation: Management should review and enhance procedures and monitoring related to the condition of the property and all units. Management?s Views: Management concurs and agreed to provide temporary housing for the affected tenants. Auditors comment: CLEARED. The City of Lynchburg conducted a follow-up inspection and deemed six units habitable. The Partnership is in the process of recertifying the affected tenants with HUD. Tenants are being placed in rehabilitated units as they become available.
Finding #2022-003: Section 8 Housing Assistance Payments Program CFDA 14.195 Condition: The Partnership?s did not maintain current documents in the tenant files, including annual Tenant Income Certification forms and income verification documentation. Criteria: The Partnership?s are required to annually confirm eligibility and maintain documentation in the tenant file including a signed Tenant Income Certification form and income verification documents. Questioned Costs: Unknown Effect: The Partnership?s are in violation of regulatory requirements governing tenant files and eligibility verification, which could result in the loss of HUD subsidies. Cause: Management?s policies with respect to tenant eligibility and tenant files were not consistently followed. Recommendation: Management should review its tenant eligibility policies and monitoring procedures to ensure compliance. Management Views: Management concurs and agrees to review and monitor policies and procedures regarding tenant eligibility and related documentation.