Finding 1106354 (2024-002)

Low Rent Program-CDFA#14.850 Finding 2024-002-Internal Control Over Compliance Needs Improvement-Eligibility Criteria and Condition It appears that there was not a representative check of tenant file and waiting list functions by a qualified second party. Auditing Statement of Auditing Standards (SAS) #115 dictates that either “absent or inadequate segregation of duties within a significant account or process” are defined by the Standard as at least a significant deficiency, if not a material weakness. The lack of a documented check noted in the first sentence is considered an inadequate segregation of duties. Context We reviewed twenty-five Low Rent files. For two re-examinations we were unable to review an annual inspection checklist. For one re-examination, we were unable to review an EIV. For three re-examinations, the lease and annual re-certifications were past-due. Effect Lease recertification procedures were deficient in these instances. Cause Apparent oversight. Recommendation Quality control checks of the waiting list and all tenant file procedures should be timely made and documented. Annual inspections should be done, documented, and available for third party review. Enterprise Income Verification [EIV] should be done, documented and available for third party review. Leases should be redone at least annually. View of Responsible Official We will comply with the auditor’s recommendation.