Finding 36763 (2022-001)

Type of Finding ? Financial Statements and Federal Award Finding Finding Resolution Status ? In progress Criteria or Specific Condition ? The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Statement of Condition ? Annual recertification of existing tenants were not completed due to lack of staffing since April 2022 until February 2023. While the property management company submitted monthly vouchers based on the previous certification, HUD discontinued the subsidy payments since July 2022. At December 31, 2022, the subsidy receivable balance was $24,146. Cause ? The annual recertification was not done due to lack of staffing at the property management company. Effect or Potential Effect ? The Project is not in compliance with the regulatory requirements. Auditor Non-Compliance Code ? Z ? Eligibility Questioned Costs ? $24,146 Reporting View of Responsible Officials ? We concur with the auditor?s recommendation. Recommendation ? The Project should complete the recertification process for the remaining tenants. Auditor?s Summary of the Auditee?s Comments on the Findings and Recommendations ? Agree Response Indicator ? Agree Completion Date ? June 30, 2023 Response ? In February 2023, Cascade Management hired a compliance specialist and resumed the recertification processes. The recertifications for 16 of 22 units have been submitted as of April 19, 2023. Four units became vacant and the management is unable to complete the recertification. The subsidies previously requested for the period without the recertification have been adjusted in the accounting records and will be adjusted on HAP vouchers in May 2023. The remaining two recertifications are in process. The tenant recertifications will be monitored by the owner to ensure they are being completed in a timely manner.