Finding 5639 (2023-001)

-
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2023-12-19

AI Summary

  • Core Issue: One tenant's income was inaccurately reported, leading to a higher rent payment.
  • Impacted Requirements: Tenant files lacked proper income verification and a signed HUD-50059 form.
  • Recommended Follow-Up: Review all tenant files for accuracy and ensure signatures are obtained on HUD-50059 forms.

Finding Text

Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Tenants must meet certain eligibility requirements for their subsidized unit. Third-party verification of income must be included in the tenant files documenting annual income. Tenant files should also contain signed copies of HUD-50059 acknowledging agreement with the rent calculation. Condition: During our audit for 2023, we tested 5 tenant files. Documentation of income verification was inconsistent with income listed on the HUD-50059 for one tenant. In addition, one HUD-50059 form was missing a tenant signature. Context: We reviewed 5 tenant files for the year. One had inaccurate income, and another was missing a tenant signature. Cause: Cause of Condition: Procedures are in place for documentation of verification of income before eligibility is determined and obtaining tenant signatures on HUD-50059 during the certification process. However, the income was entered incorrectly and inconsistently with the documentation filed and the tenant signature was inadvertently missed by the manager. Effect: The tenant’s portion of rent that was calculated resulted in the tenant paying approximately $65 higher per month. Recommendation: We recommend that Bishop Harrison Apartments review resident files to ensure income was properly calculated and documented and obtain signatures on the revised HUD-50059. Procedures for verifying income documents and building tenant files should be reviewed. Views of Responsible Officials and Planned Corrective Actions: Bishop Harrison Apartments agrees with the finding and the auditor’s recommendations have been adopted. Bishop Harrison Apartments replaced the apartment manager subsequent to year-end and has reviewed all files to ensure appropriate documentation and calculations.

Corrective Action Plan

U.S. Department of Housing and Urban Development Pond Street Housing Development Fund Company, Inc. (Bishop Harrison Apartments), HUD Project No. 014-11248 respectfully submits the following corrective action plan for the year ended March 31, 2023. Name and address of independent public accounting firm: Bonadio & Co., LLP 432 North Franklin Street #60 Syracuse, New York 13204 Audit period: April 1, 2022 – March 31, 2023 The findings from the 2023 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS – FINANCIAL STATEMENT AUDIT None FINDINGS – FEDERAL AWARD PROGRAM AUDIT Finding 2023-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Recommendation: Our auditors recommended that we review resident files to ensure income was properly calculated and documented and obtain signatures on the revised HUD-50059. Procedures for verifying income documents and building tenant files should be reviewed. Action Taken: Bishop Harrison Apartments replaced the apartment manager subsequent to year-end and has reviewed all files to ensure appropriate documentation and calculations. Name of Contact Person Responsible for Corrective Action: Kyle Lyskawa, CFO, (315) 424-1821. Completion Date: July 2023

Categories

HUD Housing Programs Procurement, Suspension & Debarment Eligibility

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $1.91M
14.195 Section 8 Housing Assistance Payments Program $403,913