Finding 1165716 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2025-12-19

AI Summary

  • Core Issue: Tenant leases and HUD Form 50059 were not properly signed and dated, violating HUD regulations.
  • Impacted Requirements: Compliance with HUD Handbook 4350.3 and 24 CFR Part 5 regarding tenant certifications and lease execution.
  • Recommended Follow-Up: Implement a control procedure to ensure all documents are fully signed and dated before tenant move-in or recertification.

Finding Text

Finding 2025-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: HUD Handbook 4350.3 REV-1, Chapter 5, and 24 CFR Part 5 require that all tenant certifications (HUD Form 50059) and leases be fully executed by the tenant and owner/agent prior to move-in or recertification to ensure compliance with program eligibility and rent calculation requirements. Condition: During the audit, a sample of 4 tenant files were tested. It was noted that the executed lease and HUD Form 50059 were not properly signed and dated by the tenant as required by HUD regulations. Context: A sample of 4 tenant files were reviewed. Cause: There were several adjustments made to this tenant’s HUD Form 50059 with additional information being received. Effect: Failure to obtain proper signatures and dates on the lease and HUD Form 50059 may result in noncompliance with HUD requirements, inaccurate tenant eligibility documentation, and potential disallowance of housing assistance payments. Recommendation: Sacred Heart Apartments should implement a control procedure to verify that all leases and HUD Form 50059 certifications are fully signed and dated by both parties prior to move-in or recertification. Views of management and planned corrective action: Sacred Heart Apartments agrees with the finding and is undertaking a review of all tenant files.

Corrective Action Plan

U.S. Department of Housing and Urban Development Cicero Housing Development Fund Company, Inc. (Sacred Heart Apartments), HUD Project No. 014-11192 respectfully submits the following corrective action plan for the year ended March 31, 2025. Name and address of independent public accounting firm: Bonadio & Co., LLP, 432 North Franklin Street #60, Syracuse, New York 13204 Audit period: April 1, 2024 – March 31, 2025 The finding from the 2025 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS – FINANCIAL STATEMENT AUDIT None FINDINGS – FEDERAL AWARD PROGRAM AUDIT Finding 2025-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Condition: During the audit, a sample of 4 tenant files were tested. It was noted that the executed lease and HUD Form 50059 were not properly signed and dated by the tenant as required by HUD regulations. Recommendation: Sacred Heart Apartments should implement a control procedure to verify that all leases and HUD Form 50059 certifications are fully signed and dated by both parties prior to move-in or recertification. Action Taken: Sacred Heart Apartments reviewed tenant files for required documentation. Completion Date: December 2025 Name of Contact Person Responsible for Corrective Action: John Lutz, Vice President of Finance, (315) 424-1821.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1165717 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.155 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS $1.29M
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $323,352