FAC Explorer

Finding 389457 (2023-002)

Material Weakness
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2024-03-29
Audit: 300412
Organization: Spectrum Closter Apartments, INC (NJ)
Auditor: Mercadien PC Certified Public Accountants

AI Summary

  • Core Issue: Billings for housing assistance payments were submitted to HUD that did not match the agreed contract rental rates.
  • Impacted Requirements: Management failed to ensure that billings were verified before submission, leading to incorrect payment amounts.
  • Recommended Follow-Up: Implement an additional supervisory review process for housing assistance payment billings before requesting funds from HUD.

Finding Text

Finding: 2023-002 Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) and Capital Advance Criteria or specific requirement: Management is required to submit billings for housing assistance payments that agree to the agreed upon contract rental rates. Condition: Management did not submit billings for housing assistance payments that agree to the agreed upon contract rental rates. Cause: Authorization for the billing was granted to the third-party vendor for submission to HUD without verification that the billings for housing assistance payments agreed to the contract rental rates. Effect: Billings were submitted to HUD at incorrect amounts for multiple months during 2023. Payment was not provided for any excess billings submitted. Recommendation: We recommend that management of the Organization establish an additional supervisory review to be performed over the housing assistance payment billings prior to requesting funds from HUD. Views of responsible officials and planned corrective actions: Management is in agreement with the finding. See Corrective Action Plan.

Corrective Action Plan

Finding Description: There was a significant audit adjustment pertaining to housing assistance payment revenue that was required in order to properly state certain account balance in accordance with U.S. GAAP. Corrective Action Taken or Planned: A secondary supervisory review and approval of the housing assistance payment vouchers conducted by the CFO will now be required before authorization for billing can be granted to the third party vendor for billing to HUD. Contact Person Responsible for Corrective Action: Danny Rosario, CFO Anticipated Completion Date: March 31, 2024

Categories

HUD Housing Programs

Other Findings in this Audit

  • 965899 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $890,000
14.181 Supportive Housing for Persons with Disabilities $77,444