Finding 46543 (2022-001)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2023-02-27

Audit: 49447

Organization: Catherine Booth Residence Inc., A Texas Corporation (TX)

Auditor: Cohnreznick LLP

AI Summary

Core Issue: Three tenant lease files lacked the required 50059 forms for recertification, indicating a failure in maintaining proper documentation.
Impacted Requirements: Noncompliance with HUD Handbook 4350.3 could lead to renting units to ineligible tenants and incorrect rent subsidies.
Recommended Follow-up: Management should implement and monitor new procedures to ensure tenant eligibility and lease file maintenance align with HUD guidelines.

Finding Text

Department of Housing and Urban Development Finding 2022-001 Section 202 Supportive Housing for the Elderly, AL 14.157 Statement of Condition During the procedures applied to a sample of eight tenant lease files, we noted three instances where the project was unable to provide the 50059 for the current year recertification. Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Cause The project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines, due to the property sale. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: R. Section 8 program administration (REAC); E - Eligibility (UG) Finding Resolution Status: Unresolved Reporting Views of Responsible Officials Management agrees with the finding. The property was sold subsequent to audit period end and current management agent did not provide the requested documents.

Corrective Action Plan

CORRECTIVE ACTION PLAN Project Legal Name: Catherine Booth Garden Apartments Waco, TX (? Project of Catherine Booth Residence, Inc., A Texas Corporation) HUD Project No.: 113-EE005-NP-WAH Audit Firm: CohnReznick LLP Period covered by the audit: 10/1/2021-1/12/2022 (day before sale) Corrective Action Plan prepared by: Name: Sriparna Mitra Position: HUD Specialist, THQ (Legal) Telephone Number: 404-728-6700 A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding 2022-001 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation that management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained. b. Action(s) Taken or Planned on the Finding N/A. B. Status of Corrective Actions on Findings Reported in the Schedule of the Status of Prior Year Findings, Questioned Costs and Recommendations Finding 2021-001 Cleared. Finding 2021-002 Unresolved. See finding 2022-001

Other Findings in this Audit

46544 2022-002

Significant Deficiency
46545 2022-001

Material Weakness
46546 2022-002

Significant Deficiency
622985 2022-001

Material Weakness
622986 2022-002

Significant Deficiency
622987 2022-001

Material Weakness
622988 2022-002

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.157	Supportive Housing for the Elderly	$4.40M