Finding Text
FINDING No. 2023-001: Section 202 Supportive Housing for the Elderly, ALN
14.157
Finding Resolution Status: Unresolved.
Information on Universe Population
Size:
Total assistance revenue.
Sample Size Information: All monthly PRAC requests.
Identification of Repeat Finding and
Finding Reference Number:
No.
Criteria: As required by HUD regulations, applications for renewal of
PRAC contracts must be completed 120 days prior to the
PRAC expiration date. Requests for monthly subsidy must
adhere to contracted rental rates approved by HUD.
Statement of Condition: The Project did not complete the renewal process 120 days
prior to the PRAC expiration date. In addition, the Project
requested $46,934 of subsidies in excess of contracted
rental rates for eight months of the year.
Cause: The Project did not follow HUD regulations for timely contract
renewal.
Effect or Potential Effect: Not adhering to HUD regulations resulting in the delay of
HUD funding and excess rent subsidies being requested and
received, materially overstating authorized federal awards.
Additionally, the Project had to take a short-term loan from
the replacement reserve account to cover the operating
shortfall while awaiting HUD approval of the new PRAC.
Auditor Non-Compliance Code:
R – Section 8 Program Administration.
Reporting Views of Responsible
Officials:
The Project agrees with the finding and the auditor’s
recommendations will be adopted.
Recommendation: The Project should comply with HUD regulations for timely
renewal of the PRAC contract to ensure no interruptions in
funding and ensure the monthly subsidy requests agree with
HUD approved c ontracted rental rates.
Response Indicator: Agree.
Completion Date: 03/31/2024
Response: The Compliance Department is monitoring and tracking
PRAC contract renewals. Going forward, reminders and
follow-ups to deadlines will be sent to ensure the contract
renewal is completed timely.
Questioned Costs: $ 46,934
Total Questioned Costs: $ 46,934