Finding Text
Type of Finding – Federal Award Finding Finding Resolution Status – In process Identification of Repeat Finding and Finding Reference Number – N/A Criteria or Specific Condition – The owner is responsible for determining that utility allowances are applied to tenants correctly in accordance with HUD determinations. Statement of Condition – Utility allowances of $52 were approved by HUD for the contract rent renewal on the subsidized units, effective July 1, 2024. However, the utility allowances on the HAP billings for all units remained at $47, and have not been updated to reflect the amount approved by HUD. The difference of $5 affects all 14 subsidized units for all 12 months of the year ended June 30, 2025, for a total difference of $840. Cause – There were staffing changes at the third party vendor that processes the HAP billings to HUD, which caused the oversite. Also, management did not verify that the utility allowance change was applied correctly. Effect or Potential Effect – The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code – Z – Eligibility Questioned Costs – $840 Reporting View of Responsible Officials – We concur with the auditor’s recommendation. Recommendation – The Project should monitor approved utility allowances to ensure they are applied properly. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations – Agree Response Indicator – Agree Anticipated Completion Date – January 1, 2026 Response – Management will have the third party vendor complete a retroactive corrective billing on the next HUD billing. The utility allowances will be monitored by the owner to ensure they are being applied properly.