Finding Text
FINDING No. 2024-002: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: HAP revenue. Sample Size Information: Monthly HAP requests. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, a HUD approved rent change must be executed as of its effective date, and all earned revenue recorded in the correct period. Statement of Condition: The Project did not implement the HUD approved rent change to its monthly HAP requests as of the October 1, 2023 effective date, resulting in a $7,686 omission. Cause: The Project did not follow HUD regulations for timely applying the gross rent change, resulting in an underpayment of HAP for each unit. Effect or Potential Effect: The Project did not request $7,686 of HAP funding in the audit period, nor record the receivable as of year-end. An audit adjustment was posted to reflect the correct HAP revenue for the year. 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 executing the required rent change as of its effective date and all earned revenue recorded in the correct period. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of timely processing of authorized rent changes.