Finding 1215398 (2025-001)

Finding No. 2025-001 – Section 811 – Federal Assistance Listing Number 14.181 Type of Finding – Federal Award Finding Finding Resolution Status – Resolved Identification of Repeat Finding and Finding Reference Number – N/A Criteria or Specific Condition – The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Statement of Condition – Annual recertifications for existing tenants were not completed in a timely manner for 13 of the 14 units during the year ended December 31, 2025. Although the property management company continued to submit monthly vouchers based on prior certifications, HUD discontinued subsidy payments for four units for the month of August 2025 due to noncompliance. As a result, subsidy revenue of $2,481 related to the four affected units and tenant rent of $1,538 for 6 out of the 13 units totaling $4,019 were not collected and were subsequently written off as vacancy loss. The later certifications were corrected retroactively to September 2025 on the December 2025 HAP voucher. Cause – The annual recertification was not done in a timely manner due to staffing issues at the property management company. Effect or Potential Effect – The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code – Z – Eligibility Questioned Costs – $4,019 Reporting View of Responsible Officials – We concur with the auditor’s recommendation. Recommendation – The Project should complete the recertification process for the tenants in a timely manner. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations – Agree Response Indicator – Agree Completion Date – December 1, 2025 Response – The tenant recertifications will be monitored by the owner to ensure they are being completed in a timely manner.