Finding 403699 (2023-001)

Finding 2023-001: Section 811 Capital Advance (CFDA #14.181) Type of Finding: Significant Deficiency / Noncompliance 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 continued to request tenant assistance payments for two tenants who moved out, collecting additional payments for several 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 repay the incorrect funds.