Finding 1208285 (2024-004)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2026-04-21
Audit: 399313
Organization: Ashmore Homes, Inc. (MD)
Auditor: SIKICH CPA LLC

AI Summary

  • Core Issue: Tenant files are missing essential documentation for eligibility, income verification, and rent determination.
  • Impacted Requirements: The Project is not meeting HUD requirements, risking incorrect rental assistance amounts.
  • Recommended Follow-Up: Reassess and strengthen internal controls and procedures to ensure all eligibility documentation is collected and maintained properly.

Finding Text

Criteria: Internal controls are required to be in place to ensure proper procedures are being followed and the Project is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Condition: During the eligibility testing of the audit, we identified tenant files were missing documentation required to be maintained to support tenant eligibility, income verification and rent determination. We consider this finding to be a significant deficiency with the Eligibility Compliance Requirement. Effect: The Project is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: $0 Cause: The Project experienced turnover resulting in inconsistent file management practices and ineffective internal review procedures to ensure that all required eligibility documentation is obtained and retained. Recommendation: The Project should consider reevaluating their established procedures and controls currently in place to ensure full compliance regarding eligibility and documentation retained in tenant files. The Project needs to correct the deficiencies noted in the tested files. Views of Responsible Officials: Management agrees with the findings. There was significant turnover during and subsequent to the audit period resulting in a lack of controls. Controls have been re-evaluated and implemented under new management. Further response is included in the Corrective Action Plan.

Corrective Action Plan

Tenant File Review - Review all tenant files; obtain and file missing documentation - May 2026 Policies and procedures - Update and document procedures; implement standardized checklist; supervisory review required. - May 2026 Staff Training - Train staff on HUD eligibility, documentation standards, and updated procedures Ongoing Monitoring - Quarterly internal audits; COO and Board Finance Committee review of compliance - ongoing Oversight and Reporting - CFO/Controller review monthly reconciliations; provide quarterly updates to finance committee - ongoing

Categories

Eligibility HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1208284 2024-003
    Material Weakness Repeat
  • 1208286 2024-005
    Material Weakness Repeat
  • 1208287 2024-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.181 SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES $1.10M
14.856 LOWER INCOME HOUSING ASSISTANCE PROGRAM SECTION 8 MODERATE REHABILITATION $93,062