Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED)
Department of Housing and Urban Development Finding, 2024-007: Major Programs: Capital Advance Program, Federal Assistance Listing Number 14.U01 and Section 8 New Construction and Substantial Rehabilitation, Federal Assistance Listing Number 14.182 - Significant Deficiency
STATEMENT OF CONDITION
The Project is required to be in compliance with each of its major programs.
EFFECT OF CONDITION
The Project was not adequately following internal controls over compliance with each of its major programs.
CONTEXT
During audit fieldwork, findings 2024-002 through 2024-006 were noted.
CAUSE OF CONDITION
The Project’s internal controls over compliance with each of its major programs were not functioning properly.
RECOMMENDATION
The auditor recommends the Project and management review and attend training on the HUD Handbook. In addition, the auditor recommends the Project and management review its internal control policies and procedures.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS
Carrasquillo Management LLC acknowledges the significant deficiency noted and is committed to improving internal controls to ensure full compliance with all HUD program requirements.
1. Policy and Procedure Review
Management has initiated a comprehensive review of internal control policies and procedures to identify gaps and align practices with the HUD Handbook 4350.3 and related program regulations. Updates will be made to strengthen compliance checkpoints and clearly define staff responsibilities for each stage of tenant file processing, income verification, certifications, and documentation retention.
2. Training and Capacity Building
Carrasquillo Management LLC has committed to ongoing staff development by enrolling relevant personnel in HUD-compliant training programs focused on regulatory requirements, internal controls, and compliance best practices. All staff involved in leasing, recertifications, and program compliance will be required to complete refresher trainings at least annually.
3. Internal Audit and Quality Control
A quarterly internal audit process has been established to monitor the effectiveness of internal controls and ensure consistent application across all major program functions. Findings from these audits will be reviewed by senior management, and corrective actions will be taken immediately when deficiencies are identified.
4. Oversight and Accountability
Management will assign a dedicated compliance coordinator responsible for overseeing adherence to HUD regulations and internal policies, providing regular updates to leadership, and ensuring follow-through on all audit-related corrective actions.
Carrasquillo Management LLC is committed to fostering a culture of compliance and accountability and will take all necessary steps to prevent future deficiencies and ensure the Project remains in good standing with HUD program requirements.