Finding 1061155 (2023-002)

2023-002 Material Weakness Related to Eligibility - Missing Documentation Criteria: Internal controls are required to be in place to ensure proper procedures are being followed and the Project is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Condition: During the eligibility testing of the audit, the following deficiencies were identified – certain tenant files are not kept on file within the required compliance timeframe. We consider this finding to be a material weakness with the Eligibility Compliance Requirement. Effect: The Project is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistant provided. Cause: The Project experienced operational challenge and staffing transition to outsourced accountants during the period of audit. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance in regard to eligibility and the timeliness of proper tenant files. The Project needs to correct the deficiencies noted in the tested files. Views of Responsible Officials: Management agrees with the findings and a response is included in the Corrective Action Plan.