Audit 7551

Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Tenants must meet certain eligibility requirements for their subsidized unit. Third-party verification of income must be included in the tenant files documenting annual income. Tenant files should also contain signed copies of HUD-50059 acknowledging agreement with the rent calculation. Condition: During our audit for 2023, we tested 5 tenant files. Documentation of income verification was inconsistent with income listed on the HUD-50059 for one tenant. In addition, one HUD-50059 form was missing a tenant signature. Context: We reviewed 5 tenant files for the year. One had inaccurate income, and another was missing a tenant signature. Cause: Cause of Condition: Procedures are in place for documentation of verification of income before eligibility is determined and obtaining tenant signatures on HUD-50059 during the certification process. However, the income was entered incorrectly and inconsistently with the documentation filed and the tenant signature was inadvertently missed by the manager. Effect: The tenant’s portion of rent that was calculated resulted in the tenant paying approximately $65 higher per month. Recommendation: We recommend that Bishop Harrison Apartments review resident files to ensure income was properly calculated and documented and obtain signatures on the revised HUD-50059. Procedures for verifying income documents and building tenant files should be reviewed. Views of Responsible Officials and Planned Corrective Actions: Bishop Harrison Apartments agrees with the finding and the auditor’s recommendations have been adopted. Bishop Harrison Apartments replaced the apartment manager subsequent to year-end and has reviewed all files to ensure appropriate documentation and calculations.

Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Tenants must meet certain eligibility requirements for their subsidized unit. Third-party verification of income must be included in the tenant files documenting annual income. Tenant files should also contain signed copies of HUD-50059 acknowledging agreement with the rent calculation. Condition: During our audit for 2023, we tested 5 tenant files. Documentation of income verification was inconsistent with income listed on the HUD-50059 for one tenant. In addition, one HUD-50059 form was missing a tenant signature. Context: We reviewed 5 tenant files for the year. One had inaccurate income, and another was missing a tenant signature. Cause: Cause of Condition: Procedures are in place for documentation of verification of income before eligibility is determined and obtaining tenant signatures on HUD-50059 during the certification process. However, the income was entered incorrectly and inconsistently with the documentation filed and the tenant signature was inadvertently missed by the manager. Effect: The tenant’s portion of rent that was calculated resulted in the tenant paying approximately $65 higher per month. Recommendation: We recommend that Bishop Harrison Apartments review resident files to ensure income was properly calculated and documented and obtain signatures on the revised HUD-50059. Procedures for verifying income documents and building tenant files should be reviewed. Views of Responsible Officials and Planned Corrective Actions: Bishop Harrison Apartments agrees with the finding and the auditor’s recommendations have been adopted. Bishop Harrison Apartments replaced the apartment manager subsequent to year-end and has reviewed all files to ensure appropriate documentation and calculations.