2022 ?1 Collection of Tenant Accounts Receivable Condition: Management failed to collect monthly lease payments resulting in tenants accruing large amounts of past due rent. Criteria: Monthly tenant lease payments should be collected and payable according to the terms of the HUD model lease. Cause: Site managers did not carry out the terms of the HUD-model lease and collect rent due. Effect: Tenant accounts receivables included significant amounts of unpaid rent for former residents. Recommendation: I recommend management develop and implement a collection policy. Management Response: Of the Net Tenant Accounts Receivable balance, there are several residents that have workout agreements for paying down their arrears balances. According to the Site Manager, there was a resident that was in a nursing home who started paying on their balance until he no longer could. This resident was not able to return to the property from the nursing home. Additionally, there was also another resident that usually paid their rent on time, but they had to spend time in the hospital which affected their ability to pay. In summary, majority of the persons with delinquent balances are on Workout Agreements. We will also be sending you an adjusting journal entries to adjust for the balance for two of the residents whose balances are being paid.