Finding 75487 (2022-001)

FINDING: 2022-001 Eligibility Federal Agency: U.S. Department of Housing and Urban Development Program: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects ? Section 223(f)/207 ALN 14.155. Condition: Six tenant files were selected for audit of the certification of the proper calculation of tenant rent. The test found that for two tenants, the submitted Form HUD-50059 was not properly completed. The first tenant?s calculation included an incorrect dividend calculation that should have been reported at a lower amount. The second tenant?s submitted Form HUD-50059 did not include retirement income from the tenant?s account. The property did not have internal controls in place for review of the third-party tenant rent calculations. Criteria: Management is responsible for establishing internal controls to ensure the accuracy of yearly completion and submission of the HUD 50059 of households occupying assisted units and making appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Cause: The property did not have internal controls in place for review of the third-party tenant rent calculations. Effect: Beechview Manor, Inc. (Property) rent for the two tenants tested was improperly allocated between the tenant portion and subsidy portion. Questioned Costs: Unknown Recommendation: The Property should have internal controls in place to review Form HUD-50059 to ensure all documentation used to calculate the tenant rent and assistance payment is supported and properly calculated. Views of Responsible Official and Planned Corrective Action: Management agrees with finding; see separate corrective action plan.