Finding Text
Statement of Condition: As a result of our audit procedures, we noted that the monthly rental income from
the tenants was not paid to the Project from Upper Bay, who acts as the tenants’ representative payee.
Criteria: The Project has entered into a project rental assistance contract under Section 811 of the National
Housing Act. Under the contract, the Project will receive monthly rent supplements directly from HUD for
qualified tenants. The amount of rent payable by a qualified resident of the apartment building is based on
the tenant’s income level. Housing assistance payments are received from HUD for the amount of the
difference between an apartment’s contract rent and the amount received from the tenant.
Cause: There was significant turnover of key personnel in the Finance department during the year, causing
new personnel who were inexperienced with the HUD rental revenue process to have to assume these
duties.
Effect: The Project did not receive the tenant monthly rental income during the fiscal year.
Recommendation: The Project should accurately maintain the monthly rental schedule and reconcile the
HUD voucher activity and tenant payments to the general ledger and bank statements. The rental activity
should be reconciled monthly and the Director of Finance should review the rental schedule monthly to
ensure the reconciliation is accurate and all activity is properly accounted for during the year.
Views of Responsible Officials and Planned Corrective Actions: Upper Bay Counseling and Support
Services, Inc. will implement monthly HUD financial meetings providing the oversight and review needed.
Financial staff will submit a report to Senior Management of HUD financial matters on a regular basis.