Finding 622347 (2022-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-05-17
Audit: 41859
Organization: Preserve Spencer House Inc. (OR)

AI Summary

  • Core Issue: Tenants were not notified of rental rate increases as required by HUD regulations, leading to lost rental income.
  • Impacted Requirements: Compliance with HUD's 30-day notification rule for rental increases and the need for an on-site property manager.
  • Recommended Follow-Up: Management should ensure an on-site manager is provided and that all tenants receive timely notifications of any rental rate increases.

Finding Text

S3800-010 - Finding Reference Number: 2022-002 S3800-011 - Title and FAN Number: Section 220 HUD 221 (d)(4) Multi Family Housing Loan FAN #14.135 S3800-015 - Type of Finding: Federal Awards Finding S3800-016 - Resolution: In process S3800-017 - Population: 100% of tenants S3800-018 - Sample Size: 100% of tenants S3800-020 - Criteria: Under HUD regulations properties are required to provide tenants at least 30 days notification of rental rate increases. S3800-030 - Statement of Condition: The property manager did not notify tenants of HUD approved increases and as a result did not bill them for it. S3800-032 - The property manager did not provide an on-site manager for the property for a significant amount of time during the year. The on-site manager notifies tenants of rental increases. S3800-033 - Effect: The property incurred a loss of rental income that it could have billed to tenants but did not because of the lack of notification. S3800-0035 - Auditor Non Compliance Code: Z-Other S3800-040 - Questioned Costs: None S3800-045 - Reporting Views of Responsible Officials: We agree with the findings and will take responsibility to make sure that Property Management Company personnel notify all tenants of rental rate increases. S3800-050 - Context: This is the first year this issue has occurred and is a direct result of not being able to provide an on-site manager for the property. S3800-080 - Recommendation: We recommend Management work directly with the Property Management Company to provide an on-site manager and notify all tenants of rental rate increases. S3800-090 - Auditors Summary of the Auditee?s Comments on Findings and Recommendations: We agree with the Auditee?s comments. S3800-130 - Response Indicator: Agree S3800-140 - Completion Date: June 30, 2023 S3800-150 - Response: We agree with Management?s response.

Categories

HUD Housing Programs Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 45904 2022-001
    Significant Deficiency Repeat
  • 45905 2022-002
    Significant Deficiency
  • 622346 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $1.80M
14.187 Section 220 Capital Grant (lihprha) $1.25M
14.195 Section 8 Housing Assistance Payments Program $198,215
14.239 Home Investment Partnerships Program $66,734