Finding Text
FINDING No. 2022-002: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved Information on Universe Population Size: Rent schedules and PRAC contract. Sample Size Information: Rent schedules and PRAC contract. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD-authorized rent increases should correspond with and agree to an approved form HUD-92458 on the yearly PRAC contract renewal. The authorized rent increase should be recognized in the period of approval with timely adjustments applied to the monthly housing assistance payments requests on form HUD-52670. Statement of Condition: The Project did not apply a gross rent increase that was approved on the annual PRAC contract renewal and an approved form HUD-92458 was not obtained. A receivable for the rent increase was not recorded by management and a total receivable of $26,208 was recorded through audit adjustment. Cause: The Project materially understated housing assistance payments requiring material adjustment. Effect or Potential Effect: The Project was not able to utilize the additional funds awarded through the approved rent increase in the intended period and without correction through audit adjustment, revenue of the current audit period presented on the financial statements and reported federal awards would have been materially misstated. Auditor Non-Compliance Code: R ? Section 8 Program Administration. Questioned Costs: $24,564 Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that rent increases are submitted for approval on form HUD-92458 in a timely manner and that the submitted amounts agree to the approved PRAC renewal contract. Response Indicator: Agree. Completion Date: 12/31/2023 Response: The compliance department is now monitoring and tracking PRAC contract renewals for properties. Going forward reminders and follow up to deadlines will be issued to ensure rent increases are submitted timely.