Finding Text
2022-001 U.S. Department of Housing and Urban Development Federal Financial Assistance Listing #14.155 Section 223(f) Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Eligibility Significant Deficiency in Internal Control over Compliance Criteria: 2 CRF 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Our testing of tenant files identified one instance where a tenant?s medical expenses were incorrectly calculated. Cause: There was a lapse in the internal control process for maintaining tenant files within compliance requirements. Effect: Lack of compliance with designed internal controls over tenant files could adversely affect Baker Park, Inc.?s compliance with HUD regulations. Context/Sampling: A nonstatistical sample of 10 tenant files out of 61 total tenants residing in the project during the year, including move-in and move-out residents, was selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend management review policies and procedures with applicable employees and remind them of the importance of following regulations regarding the maintenance of tenant files. Form 50059 should be updated, as needed. Views of Responsible Officials: Management agrees with the finding and recommendation.