Finding 1079607 (2024-002)

-
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2024-10-18

AI Summary

  • Core Issue: The Project failed to implement a HUD approved rent change by the effective date, leading to a $7,686 underpayment in HAP funding.
  • Impacted Requirements: Compliance with HUD regulations for timely execution of rent changes and accurate recording of revenue.
  • Recommended Follow-Up: Ensure adherence to HUD regulations and complete additional training on processing rent changes by the completion date of 03/31/2025.

Finding Text

FINDING No. 2024-002: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: HAP revenue. Sample Size Information: Monthly HAP requests. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, a HUD approved rent change must be executed as of its effective date, and all earned revenue recorded in the correct period. Statement of Condition: The Project did not implement the HUD approved rent change to its monthly HAP requests as of the October 1, 2023 effective date, resulting in a $7,686 omission. Cause: The Project did not follow HUD regulations for timely applying the gross rent change, resulting in an underpayment of HAP for each unit. Effect or Potential Effect: The Project did not request $7,686 of HAP funding in the audit period, nor record the receivable as of year-end. An audit adjustment was posted to reflect the correct HAP revenue for the year. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should comply with HUD regulations for executing the required rent change as of its effective date and all earned revenue recorded in the correct period. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of timely processing of authorized rent changes.

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $1.22M
14.195 Section 8 Housing Assistance Payments Program $232,409
14.191 Multifamily Housing Service Coordinators $22,166
14.195 Section 8 Housing Assistance Payments Program - Covid-19 $2,147