Finding 178637 (2022-002)

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Requirement
P
Questioned Costs
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Year
2022
Accepted
2023-05-07

AI Summary

  • Core Issue: The Project's occupancy rate is too low, with a 29% vacancy expense impacting financial stability.
  • Impacted Requirements: The Project must maintain adequate occupancy to support operations and avoid excessive use of reserve funds.
  • Recommended Follow-Up: Focus on strategies to attract tenants and reduce vacancies to improve revenue and operational funding.

Finding Text

Supportive Housing for Persons with Disabilities (Section 811), CFDA 14.181 Criteria: The Project?s occupancy rate should be adequate to maintain Project operations. Statement of Condition: The Project?s vacancy expense was 29% of rental revenue for the year ended September 30, 2022. Cause: Of the Project?s eight total units, one was vacant the entire year, and two others were vacant several months during the year. Effect: Decreased revenue may result in excessive future usage of replacement reserve funds. Decreased revenue may also negatively impact the Project?s ability to fund future Project operations. Recommendation: The Project should continue its efforts to obtain tenants and decrease vacancies. Views of Responsible Officials: We agree with the finding. The Project will continue its attempts to decrease vacancies.

Corrective Action Plan

Corrective Action Plan: The Project is doing all that is within its control to get the vacant units rented. Auditee Contact: John Nash (The Arc of North Carolina, Inc.), Management Agent

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $762,700
14.195 Section 8 Housing Assistance Payments Program $33,684