FAC Explorer

Finding 1155791 (2025-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2025-10-07
Audit: 368188
Organization: Warren Village, Inc. (CO)
Auditor: Jds Professional Group

AI Summary

  • Core Issue: Two tenant files from a sample of 17 did not meet eligibility verification requirements, risking compliance with HUD funding.
  • Impacted Requirements: Missing signatures on tenant agreements and incomplete documentation, specifically the HUD Form 50059.
  • Recommended Follow-Up: Review tenant files from the property management transition period and engage a third-party compliance company to ensure all documentation is complete and accurate.

Finding Text

U.S. Department of Housing and Urban Development - Section 8 - Housing Assistance Payments Program Criteria: Condition: Assistance Listing No. 14, 195 Eligibility, Significant Deficiency The Uniform Guidance requires the verification of eligibility for individuals which includes (among other requirements) obtaining signed applications that contains the information needed to determine eligibility as well as documenting tenant certifications. In a tenant file sample of 17 tenants, 2 tenant files identified exceptions to compliance with eligibility requirements. Both tenant files with exceptions were tenants that moved into units between July 2024 and August 2024. One tenant file contained the tenant lease agreement that was not signed by the tenant nor the Organization housing supervisor and the tenant pre-application that was not signed by either party. The other tenant file contained no copy of the HUD Form 50059. As a component of the Organization's internal control over eligibility compliance, the Organization has implemented a signature required by a housing representative directly on the Form 50059 as evidence of a complete tenant certification process occurring at a minimum once every twelve months. One tenant file identified as an exception included the Form 50059 that was not signed and the other tenant file identified as an exception was missing the Form 50059. Effect: The Organization is at risk of jeopardizing the continued funding provided by the U.S. Department of Housing and Urban Development. Questioned Costs: None. Cause: The Organization changed property management companies during the summer of 2024. During the transition, there was an oversight deficiency around the complete tenant certification process as the process and compliance protocols changed between management agencies. Recommendation: We recommend that the Organization confer with Property Management staff to examine selected tenant files from the transition of property management companies through the recertification period of all tenants up to July and August 2025 to ensure appropriate evidence is contained within all tenant files to support complete tenant certification and eligibility. Response: The Organization has already discussed with property management a review of all tenant files from June 2024 to present and requested a third-party compliance company be engaged. Corrections will be made where feasible along with ongoing process improvements, including the implementation of a new internal Housing Director position to provide greater oversight of files and property management accountability.

Corrective Action Plan

Cognizant or Oversight Agency for Audit, Warren Village, Inc. respectfully submits the following corrective action plan for the year ended March 31 , 2025. Audit period: Ended March 31 , 2025 The findings from the 3/31/2025 schedule of findings and questioned costs are summarized below. The find ings are numbered consistently with the numbers assigned in the schedule. Financial Statement Audit Findings Material Weakness 2025-001: Adjusting Journal Entries Recommendation: Auditors recommend the Organization improve communication with the Partnership and the Partnership auditor to ensure all related Partnership transactions are recorded timely, accurately and within the appropriate period. Action Taken: Management will engage the Partnership auditor earlier in more thorough communication around audited financial statement details and reconciling entries in future years, beginning with the 2025 calendar year audit commencing March 2026. Management was challenged by the one-time, varying construction project and LIHTC partner deliverables, complex legal entity pieces, and shortage of review and financial integration time between audits. Responsible Party: Vice President of Strategy, Finance & Operations Anticipated Date of Completion: June 2026 Responsible Contact: Amy Fleming, 303-320-5050 or email afleming@warrenvillage.org . Federal Award Findings and Questioned Costs Elig ibility, Significant Deficiency 2025-002: U.S. Department of Housing and Urban Development - Section 8 - Housing Assistance Payments Program Assistance Listing No.14.195 Recommendation: Auditors recommend that the Organization confer with Property Management staff to examine selected tenant files from the transition of property management companies through the recertification period of all tenants up to July and August 2025 to ensure appropriate evidence is contained within all tenant files to support complete tenant certification and eligibility. Action Taken: We have discussed with property management a review of all tenant files fromJune 2024 to August 2025 and requested a third-party compliance company or equivalent experience be engaged. Corrections will be made where feasible along with ongoing process improvements, including the implementation of a new internal Housing Director position to provide greater oversight of files and property management accountability. The Housing Director was hired July 21, 2025, with a target date set of December 31, 2025, for completed file review. Responsible Party: Housing Director, Vice President of Strategy, Finance & Operations and Property Management (Rocky Mountain Communities) Anticipated Date of Completion: January 2026 Responsible Contact: Amy Fleming, 303-320-5050 or email afleming@warrenvillage.org If the Cognizant or Oversight Agency for Audit has questions regarding this plan, please call Amy Fleming, Vice President of Strategy, Finance & Operations at 303-320-5050 or email at afleming@warrenvillage.org.

Categories

HUD Housing Programs Internal Control / Segregation of Duties

Programs in Audit

ALN Program Name Expenditures
14.195 Project-Based Rental Assistance (pbra) $1.34M
10.558 Child and Adult Care Food Program $86,800