Finding 560404 (2023-002)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2025-05-14

Audit: 356309

Organization: The Pines Housing, Inc. (OR)

Auditor: Novogradac & Company LLP

AI Summary

Core Issue: Management failed to provide required tenant income and security deposit documents for a significant number of files.
Impacted Requirements: Compliance with HUD regulations regarding tenant eligibility and documentation is not being met.
Recommended Follow-Up: Implement regular reviews of tenant files and provide training to address documentation deficiencies and ensure compliance.

Finding Text

Finding No. 2023-002 Condition – As of December 13, 2024, management was unable to provide tenant income documents for 2 tenant files of 7 tenant files sampled out of the population (66 total tenant files). Management was unable to provide tenant security deposit documents for all 3 move-ins and move-outs sampled out of the population (9 total move-ins and 13 total move-outs during the audit period). Criteria – Occupancy personnel are expected to have a strong knowledge of the various compliance requirements regarding tenant eligibility and tenant security deposit as explained in the HUD regulatory agreement. Controls should be in place to ensure noncompliance is detected and corrected on a timely basis. Cause – The system of quality review that was in place was not sufficient to detect all instances of noncompliance with file documentation. Effect – There is a possibility that, under the HUD regulatory agreement, HUD may invoke any remedies available by law to redress the breach or compel compliance by the Organization with the tenant file requirements. Recommendation – We recommend that control systems are put in place to ensure there are regular reviews of tenant files to enable management to identify deficiencies and provide training, guidance, and procedures to eliminate errors and issues of noncompliance in the future. Auditor noncompliance code – S – Internal Control Deficiencies Reporting views of responsible officials - Management understands the importance of the matter and the issues that arise if tenant files are not properly maintained. The circumstances surrounding the documents that were not provided were reviewed, and a procedural change has been implemented. Concur or do not concur with this finding - Concur Agree or disagree with auditor recommendations – Agree Completion date or proposed completion date – December 18, 2024 Actions taken or planned on the finding – The Organization will implement procedures to ensure the management agent maintains complete tenant files.

Corrective Action Plan

Finding Reference Number: 2023-002 Condition: As of December 12, 2024, management was unable to provide tenant income documents for 2 tenant files of 7 tenant files sampled out of the population (66 total tenant files). Management was unable to provide tenant security deposit documents for all 3 move-ins and move-outs sampled out of the population (9 total move-ins and 13 total move-outs during the audit period). Recommendation: We recommend that control systems are put in place to ensure there are regular reviews of tenant files to enable management to identify deficiencies and provide training, guidance, and procedures to eliminate errors and issues of noncompliance in the future. Reporting views of responsible officials Our Just Future, on behalf of The Pines Housing, Inc., both concurs with these findings and agrees with auditor recommendations. Completion date or proposed completion date: December 18, 2024 Action(s) taken or planned on the finding To address this finding, OJF will take the following actions: 1. Implement regular tenant file reviews at least semi-annually beginning January 15, 2025 a. Responsible party: OJF asset management director and property management portfolio manager 2. Develop a mandatory training program on compliance requirements for property management site staff to follow by February 15, 2025 a. Responsible party: OJF asset management director and property management portfolio manager 3. Revise and distribute existing tenant file management procedures by February 15, 2025 a. Responsible party: OJF asset management director and property management portfolio manager 4. Establish a monitoring and feedback system by March 15, 2025 for site staff to seek guidance on or report challenges of file management so that advice can be given and/or corrective action taken a. Responsible party: OJF asset management director and property management portfolio manager 5. Conduct quarterly management reviews beginning 4/15/2025 to discuss and evaluate the effectiveness of above actions a. Responsible party: OJF asset management director and property management portfolio manager

Other Findings in this Audit

560405 2023-002

Significant Deficiency
560406 2023-003

Significant Deficiency
560407 2023-003

Significant Deficiency
1136846 2023-002

Significant Deficiency
1136847 2023-002

Significant Deficiency
1136848 2023-003

Significant Deficiency
1136849 2023-003

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.U01	Low Income Housing Preservation and Resident Homeownership Act of 1990 - Capital Grant	$2.25M
14.135	Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate	$1.82M
14.195	Project-Based Rental Assistance (pbra)	$428,547
14.239	Home Investment Partnerships Program	$400,000