Finding 4867 (2023-001)

FINDING No. 2023-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Total assistance revenue. Sample Size Information: All monthly PRAC requests. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, applications for renewal of PRAC contracts must be completed 120 days prior to the PRAC expiration date. Requests for monthly subsidy must adhere to contracted rental rates approved by HUD. Statement of Condition: The Project did not complete the renewal process 120 days prior to the PRAC expiration date. In addition, the Project requested $46,934 of subsidies in excess of contracted rental rates for eight months of the year. Cause: The Project did not follow HUD regulations for timely contract renewal. Effect or Potential Effect: Not adhering to HUD regulations resulting in the delay of HUD funding and excess rent subsidies being requested and received, materially overstating authorized federal awards. Additionally, the Project had to take a short-term loan from the replacement reserve account to cover the operating shortfall while awaiting HUD approval of the new PRAC. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should comply with HUD regulations for timely renewal of the PRAC contract to ensure no interruptions in funding and ensure the monthly subsidy requests agree with HUD approved c ontracted rental rates. Response Indicator: Agree. Completion Date: 03/31/2024 Response: The Compliance Department is monitoring and tracking PRAC contract renewals. Going forward, reminders and follow-ups to deadlines will be sent to ensure the contract renewal is completed timely. Questioned Costs: $ 46,934 Total Questioned Costs: $ 46,934