Finding Text
FINDING No. 2024-003: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Rental Housing Projects, ALN 14.155
Finding Resolution Status: Unresolved.
Information on Universe Population Size: Total rent revenue.
Sample Size Information: Total rent revenue.
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 accepted HUD approved rent change as of the March 1, 2023 and March 1, 2024 effective dates, resulting in a $59,201 omission.
Cause: The Project did not follow HUD regulations for timely applying the gross rent change, resulting in an underpayment of rent for each unit.
Effect or Potential Effect: The Project did not request $59,201 of HAP funds in the audit period, nor record the receivable at year end. An audit adjustment was posted to reflect the correct rent 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 recommendation will be adopted. Recommendation: The Project should comply with HUD regulations for executing the required rent change as of its effective date when approved.
Response Indicator: Agree.
Completion Date: 3/31/2025
Response: New manager has been trained to implement gross rent changes immediately and new procedures have been implemented to ensure timely changes. Questioned Costs – Department of Housing and Urban Development $59,201