Finding Text
Finding No. 2025-007 Uniform Guidance Compliance Requirement Code: N-Special Tests and Provisions - Significant Deficiency HUD Low Income Housing Preservation and Resident Homeownership Act of 1990 Federal Assistance Listing Number #99.999 Low Income Housing Preservation and ResidentHomeownership Act of 1990 - Capital Grant Entity IdentifyingNumber Initial Year Findinginstances Beacon 126-35062 1996 2 Total instances 2 Criteria In accordance with the Use Agreements, Housing Quality Standards require that the Owner shall maintain the property in good repair and condition. Condition The owner was unable to provide support that they ensured passing HQS inspections were performed during 2025 for two out of three tenant files tested. Cause Management did not have in place proper procedures and controls to ensure that HQS inspections were performed and properly documented during the year ended December 31, 2025. Effect or Potential Effect Housing units may be out of compliance with HUD Quality Standards. Questioned Costs: Not applicable Context In connection with the procedures applied to tenant file testing there were 2 instances of the 3 files tested where the support of passing HQS inspections were not performed/provided during the year ended December 31, 2025. Repeat Finding: Yes - Finding 2024-007 Recommendation Management should establish procedures to ensure that all units are inspected timely, that they meet the HUD Housing Quality Standards and that the responses to any findings are cleared timely and that the full process is documented in tenant files. Views of Responsible Officials REACH has policies in place for annual unit inspections. Management created a new unit inspection form to capture inspection, work orders, and re-inspection in 2025. Portfolio Managers reviewed these new forms with site teams and provided training on how to complete these forms. Property management team also sent emails and Teams reminders to the site team to ensure unit inspection, work orders, and re-inspections are completed on time and properly. During the second quarter of 2026, REACH outsourced both property management and compliance functions to a third-party management company to address outstanding compliance issues.