Finding Text
S3800-010: Finding Reference Number 2026-004 (Material Weakness) S3800-011: Program Information Federal Program: Mortgage Insurance for Rental and Cooperative Housing Section 221(d)(4) Federal Agency: U.S. Department of Housing and Urban Development (HUD) Assistance Listing #: 14.135 Pass-through Entity: None Federal Award Identification Number and Year: N/A Type of Compliance Finding: N – Special Tests and Provisions S3800-015: Type of Finding Federal Awards S3800-016: Finding Resolution Status Unresolved S3800-017: Information on Universe Population Size 36 S3800-018: Sample Size Information 6 S3800-019: Identification of Repeat Finding and Finding Reference Number N/A S3800-020: Criteria In accordance with the Regulatory Agreement subsection 4b, owners may charge to and receive from any tenant such amounts as from time to time may be mutually agreed upon between the tenant and the Owners for any facilities and / or services which may be furnished by the Owners or others to such tenant upon his request, in addition to the facilities and services included in the approved rental schedule. S3800-030: Statement of Condition During our audit of the Organization’s fiscal year ended February 26, 2026 federal award program, we noted that the Organization did not provide to us tenant files for two of the six samples selected. Therefore, we were not able to evaluate tenant charges with approved rental schedules. S3800-032: Cause Management failed to provide tenant files for evaluation. S3800-033: Effect or Potential Effect The Organization is not complying with the Regulatory Agreement for mutually agreed upon amounts in an approved rental schedule between tenants and owners. S3800-035: Auditor Non-Compliance Code: S – Internal control deficiencies S3800-040: Questioned Costs Unknown S3800-045: Reporting Views of Responsible Officials Management agrees with the finding. S3800-050: Context The Organization is required to comply with the Regulatory Agreement. S3800-080: Recommendation The Organization should maintain lease agreements in tenant files and establish processes and procedures to ensure compliance with the provisions in the Regulatory Agreement. S3800-090: Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Auditee agreed with our recommendation. S3800-130: Response Indicator Agree S3800-140: Completion Date or Proposed Completion Date September 30, 2026 S3800-150: Response See Corrective Action Plan