Finding 503162 (2024-001)

Finding 2024 – 001 Type of Findings: Significant deficiency in internal control over compliance and instance of immaterial noncompliance. Federal Program: HUD Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing #14.181. Compliance Requirement: Eligibility Criteria: In accordance with Renaissance Court's regulatory agreement with HUD and the 2024 compliance supplement, Renaissance Court is required to annually recertify its tenants as eligible tenants. It is the responsibility of management to design and implement internal controls to ensure the tenants are recertified within the applicable timeframe required by HUD. Condition: Renaissance Court did not recertify some of its tenants within the timeframe specified by HUD. Cause: There were not properly designed or implemented internal controls to ensure the tenant recertifications were performed in the timeframe required by HUD. Effect: The effect is immaterial non-compliance with the terms of the HUD program listed above. The deficiency in internal controls over compliance could lead to material non-compliance with the eligibility compliance requirement. Questioned Costs: None Repeat Finding: No. Context: We selected a sample of 6 tenants from a population of 21. The sample size was determined based upon guidelines provided by the AICPA and was not considered a statistically valid sample. We performed procedures to determine whether the annual tenant recertification occurred within the timeframe specified by HUD. From our sample, four tenant recertification were not performed within the 12 month timeframe specified by HUD. Recommendation: We recommend management design and implement internal controls over compliance to ensure tenant recertification is performed within the timeframe specified by HUD.