Finding 6846 (2023-001)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2023-12-28

AI Summary

  • Core Issue: The Project lacks adequate internal controls for eligibility, violating federal requirements.
  • Impacted Requirements: This situation breaches 2 CFR section 200.303, which mandates proper internal controls for managing federal awards.
  • Recommended Follow-Up: The Project should implement stronger internal controls over eligibility as outlined in the Corrective Action Plan.

Finding Text

Section 223(f) Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects , ALN #14.155 Statement of Condition: The Project does not have sufficient internal controls in place over eligibility. Criteria: Pursuant to 2 CFR section 200.303, Uniform Guidance requires that entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Effect of Condition: This is a violation of Uniform Guidance requirements. Cause of Condition: The Project does not have sufficient internal controls in place over eligibility. Recommendation: It is recommended that the Project develop sufficient internal controls over eligibility. Response: See Corrective Action Plan.

Corrective Action Plan

2023-01 - Section 223(f) Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, ALN #14.155 Statement of Condition: The Project does not have sufficient internal controls in place over eligibility Response: Developac, Inc., Management Agent, will immediately implement the following corrective actions to cure said deficiency: 1. Management Agent will be solely responsible for updating housing software with the annual income limits provided by HUD 2. Management Agent will periodically review tenant move-in files for eligibility verification

Categories

Procurement, Suspension & Debarment Eligibility HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 583288 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $1.59M
14.182 Section 8 New Construction and Substantial Rehabilitation $408,895