Finding #2025-002 – Significant Deficiency and Other Noncompliance. Federal Awards: U. S. Department of Housing and Urban Development, Passed through City of Houston, Assistance Listing #: 14.239, Contract number: 4600016100, 4600008347, 4600015112, 4600013379, 460000866, 4600009893, 4600010749, and 03-0774/FC55324, Contract period: Grant agreement expires 15-30 years from the date of completion. U. S. Department of Housing and Urban Development, Passed through Texas Department of Housing and Community Affairs, Assistance Listing #: 14.239, Contract number: 92230123418 and 1000084, Contract period: Grant agreement expires 20-30 years from the date of completion. Condition and context: In a sample of 40 tenant files, we noted four instances where the monthly rental rate recorded on the property’s rent roll did not match the rate authorized in the signed lease contract. Recommendation: Implement a secondary review of rental agreements and rates per the property management system. Consider periodic reconciliation compliance procedures that compares a sample of active rent rolls directly against executed lease files. Planned corrective action: Effective October 1, 2026, NHH’s Property Management team will conduct monthly reconciliations comparing a sample of active rent rolls and property management system records directly against executed lease agreements and amendments. A minimum of 10% of active tenant files at each property will be reviewed monthly. Any discrepancies identified will be corrected promptly. NHH’s Compliance team will perform quarterly oversight reviews beginning January 2027 to verify that the monthly reconciliations are completed and documented and that identified discrepancies are resolved. NHH’s Vice President of Property Management and Maintenance will review the quarterly reconciliations. Responsible officer: Stacey Lastovica, Vice President of Property Management and Maintenance. Estimated completion date: Monthly Property Management reconciliations will begin on October 1, 2026, with quarterly Compliance oversight beginning in January 2027. These controls will remain ongoing.