Finding 26297 (2022-001)

Type of Finding: Material Weakness / Noncompliance Repeat Finding: Finding is a repeat finding from prior year. Prior year reference 2021-001. Criteria: The Regulatory Agreement requires the Project to ensure controls exist to request the appropriate funds for each tenant on a monthly basis. Condition: The Project did not request tenant assistance payments for one tenant for the entire year and failed to remove two tenants who moved out, collecting additional payments for seven months. Cause: The Project's controls over monthly housing assistance payments were not working properly. Effect or Potential Effect: The incorrect request of tenant funds could, at the discretion of HUD, result in the capital advance being called due, which would require the Project to reimburse HUD for the advance and pay interest. Perspective Information: The Project failed to complete the monthly housing assistance payment vouchers correctly for all twelve months. Through prior history with Project, this is not a systemic issue that cannot be rectified. Recommendations: The Project should obtain complete an accurate housing assistance payment voucher each month and reconcile all amounts requested to the accounts receivable ledger each month. Views of Responsible Officials: Management concurs with the finding. Management will submit an updated housing assistance payment voucher to correct for the unrequested funds