Finding 555669 (2024-001)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2025-04-23

AI Summary

  • Core Issue: Incomplete transfer of waitlist information during data migration from RealPage to Fortress, leading to noncompliance with HUD regulations.
  • Impacted Requirements: Failure to maintain a complete and chronological waitlist as required by 24 CFR 891.410 and 24 CFR 982.204, affecting tenant selection processes.
  • Recommended Follow-Up: Establish a review process for data accuracy during migrations, reconstruct missing waitlist data, and create a written policy for waitlist maintenance to ensure compliance.

Finding Text

2024-001 Incomplete Transfer of Waitlist Information: Internal Control Weakness Impacting HUD Compliance Program Name/Assistance Listing Title: Supportive Elderly Housing - Section 202 Federal Assistance Listing No: 14.157 Federal Agency: U.S. Department of Housing and Urban Development Type of Finding: Federal Award Finding Compliance Requirements: Eligibility Population Size and Sample Size Information: Out of total 37 tenants, 5 samples were selected. Criteria: HUD regulations states the following: a. 24 CFR 891.410 (a). Owners shall maintain a written, chronological waiting list showing the name, race, gender, ethnicity, and date of each person applying for the program. b. HUD Occupancy Handbook 4350.3 REV-1 (Chapter 4: Waiting List and Tenant Selection): Owners must develop a method to maintain documentation of the waiting list composition, application status, and actions taken. c. Compliance Supplement May 2024 : Owners must document that participants selected from the waitlist met the preference criteria and were selected according to the admission policies in the administrative plan. (24 CFR section 891.410) d. 24 CFR 982.204: Except for special admissions, participants must be selected from the PHA waiting list. The PHA must select participants from the waiting list in accordance with admission policies in the PHA Administrative Plan. The PHA must maintain information that permits the PHA to select participants from the waiting list in accordance with the PHA admission policies. The waiting list must contain the following information for each applicant listed: (1) Applicant name; (2) Family unit size (number of bedrooms for which family qualifies under PHA occupancy standards); (3) Date and time of application; (4) Qualification for any local preference; (5) Racial or ethnic designation of the head of household. Condition: During eligibility testing, we were unable to verify compliance with HUD regulations requiring selection from the waiting list in accordance with the administrative plan (24 CFR section 891.410 and 24 CFR 982.204). The waitlist application dates generated from the Project’s software reflect the initial data load from RealPage to Fortress and did not include essential waitlist notes. This lack of documentation prevented us from verifying that tenant selection adhered to HUD requirements and selected from waiting list in correct order. Cause of Condition: The issue occurred due to an incomplete data transfer during the migration from RealPage to Fortress. Internal controls over the data migration process were insufficient to ensure that all required information, such as waitlist notes, was successfully transferred. Potential Effect of Condition:  Noncompliance with HUD regulations for maintaining an accurate and chronological waitlist.  Inability to demonstrate compliance with tenant selection requirements, which may result in findings of noncompliance, questioned costs, or penalties.  Increased risk of unfair or improper tenant selection due to incomplete records. Questioned Costs: No questioned costs are identified at this time, as the issue primarily concerns documentation and internal controls rather than direct financial mismanagement. Reporting Views of Responsible Officials: The Organization agrees with the findings and recommendations and will adhere to the corrective action plan. Context: The incomplete waitlist data impacts all units under the project where tenant selection relies on the waitlist. This issue arose during the migration from RealPage to Fortress and was discovered during eligibility testing for compliance with HUD regulations. Recommendation:  Implement a process to review and verify the accuracy and completeness of data during system migrations, including waitlist information and notes.  Reconstruct missing waitlist data by reviewing available source records, if feasible.  Develop and document a written policy for waitlist maintenance and data integrity to ensure ongoing compliance with HUD regulations. Management Response: Management is currently conducting a comprehensive review of the process to ensure alignment with compliance requirements and identify areas for improvement.

Corrective Action Plan

Management is currently conducting a comprehensive review of the process to ensure alignment with compliance requirements and identify areas for improvement. Completion Date: Immediately

Categories

HUD Housing Programs Allowable Costs / Cost Principles Eligibility Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1132111 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $155,584