Finding 1208420 (2025-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-04-22

AI Summary

  • Issue: Monthly billings were not adjusted correctly after recertifications, leading to incorrect subsidy amounts.
  • Requirements Impacted: The Organization failed to follow proper procedures for adjusting rental rates based on annual recertifications.
  • Follow-Up: Review and improve controls for billing adjustments; ensure repayment of overpaid subsidies to HUD.

Finding Text

Criteria: The Organization is required to make adjustments to monthly billings as a result of recertifications. Statement of Condition: The Organization did not properly adjust monthly billings as a result of recertification. Cause of condition: The Organization processed an adjustment to a monthly billing as a correction of the rent for one month instead of a change in rental rate as a result of the annual recertification. Effect of condition: The Organization received the incorrect subsidy for two of its tenants for 12 months. Recommendation: The design of the current controls should be reviewed to ensure that all adjustments to monthly billings are reviewed before processing. The Organization should repay the overpayment of subsidy to HUD. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure that all adjustments to monthly billings are reviewed to ensure they are processed correctly. Overpayment of the subsidy will be repaid to HUD through adjustments to monthly billings.

Corrective Action Plan

Recommendation: The design of the current controls should be reviewed to ensure that all adjustments to monthly billings are reviewed before processing. The Organization should repay the overpayment of subsidy to HUD. Action Taken: The management of Jude’s Place Apartments, Inc. accepts the recommendation of Deming, Malone, Livesay & Ostroff and, accordingly, management will implement procedures to ensure that all adjustments to monthly billings are reviewed to ensure they are processed correctly. Overpayment of subsidy will be repaid to HUD through adjustments to monthly billings.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1208419 2025-002
    Material Weakness Repeat
  • 1208421 2025-004
    Material Weakness Repeat
  • 1208422 2025-005
    Material Weakness Repeat
  • 1208423 2025-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.181 SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES $982,206