Finding 42481 (2022-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-08-13
Audit: 39156
Organization: Berlin Retirement Homes, Inc. (MA)
Auditor: Wipfli LLP

AI Summary

  • Core Issue: The project failed to rent at least 40% of available units to extremely low-income tenants as required by HUD Section 8.
  • Impacted Requirements: Only 1 out of 7 available units were rented to extremely low-income tenants, with insufficient evidence of proper marketing efforts.
  • Recommended Follow-Up: Review and consistently implement the resident selection plan to ensure compliance with HUD requirements.

Finding Text

Questioned Cost: $0 Criteria ? Units that became available during the year were not rented to the required percentage of tenants with extremely low income. Condition ? HUD Section 8 requires at least 40% of the units that become available in the fiscal year be offered to extremely low-income tenants. If the units were actively marketed and the project was unable to achieve the 40% target, the units can be rented to other eligible tenants. During the 15-month period ended December 31, 2022, there were seven units that became available and only one was rented to an extremely low-income tenant. Evidence of proper marketing could not be produced justifying that the lower than 40% could be obtained. Cause ? The entity switched management companies during the year and prior to the new management company the tenant selection plan was inconsistently followed causing this finding. Effects or Potential Effects ? The project did not meet the HUD Section 8 housing requirements. Auditor?s Recommendation ? Resident selection plan should be reviewed and consistently followed. View of Responsible Officials ? Management agrees with the finding and has implemented a corrective action plan.

Corrective Action Plan

#2022-001 - Special Tests and Provisions - Extremely Low-Income Description: Units that became available during the year were not rented to the required percentage of tenants with extremely low income. Action Taken: There were several move-ins during the 15-month period ended December 31, 2022. Three were before or during the transition to the current management company and thus the normal check for extremely low income was overlooked. Eastpoint Properties, Inc. has a policy whereby this information is checked as new tenants are selected.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 42478 2022-004
    Significant Deficiency
  • 42479 2022-002
    Significant Deficiency
  • 42480 2022-003
    Significant Deficiency
  • 618920 2022-004
    Significant Deficiency
  • 618921 2022-002
    Significant Deficiency
  • 618922 2022-003
    Significant Deficiency
  • 618923 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.415 Rural Rental Housing Loans $1.56M
14.195 Section 8 Housing Assistance Payments Program $258,131