Finding 946284 (2021-007)

Material Weakness
Requirement
B
Questioned Costs
-
Year
2021
Accepted
2024-02-20
Audit: 291369
Organization: Trinity Community Housing CORP (IL)
Auditor: Icl LLC

AI Summary

  • Core Issue: The Project failed to provide necessary general and liability insurance policies, violating HUD requirements.
  • Impacted Requirements: This oversight affects compliance with HUD Handbook 4350.01, Chapter 21-4, which mandates maintaining fire and hazard insurance.
  • Recommended Follow-Up: The Project should locate and present the required insurance policies to confirm adequate coverage during the audit period.

Finding Text

Criteria: Per HUD Handbook Multifamily Asset Management and Project Servicing (4350.01), Chapter 21-4 Section 2. Required Insurance For All HUD-Assisted and HUD-Held Multifamily Projects, “HUD Insured and HUD-Held Projects. Throughout the life of the mortgage insurance contract, the mortgagee of a HUD-insured project (or the Field Office Loan Management Branch Chief for a HUD-held project) must assure that the mortgagor maintains fire and other hazard (as determined by HUD) insurance on the property pledged as security for the loan. Condition: During our testing of the Management Function, the Project could not provide general and liability insurance policies to assure that the Project maintains fire and hazard insurance on the property pledged as security for the loan. Cause: Due to staff turnover, general & liability policies could not be located for testing of insurance coverage of the property. Effect: The test of insurance could not be performed to determine whether liability coverage is sufficient with Chapter 21 of HUD Handbook 4350.1. Recommendation: We recommend that the Project provide general & liability policies to determine liability coverage of the property during the audit period. Views of Responsible Officials and Corrective Action Plan: No disagreements with the audit finding.

Categories

HUD Housing Programs Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 369836 2021-001
    Material Weakness
  • 369837 2021-002
    Material Weakness Repeat
  • 369838 2021-003
    Material Weakness
  • 369839 2021-004
    Material Weakness
  • 369840 2021-005
    Material Weakness
  • 369841 2021-006
    Material Weakness Repeat
  • 369842 2021-007
    Material Weakness
  • 369843 2021-008
    Material Weakness
  • 369844 2021-009
    Material Weakness
  • 369845 2021-010
    Material Weakness
  • 369846 2021-011
    Material Weakness
  • 369847 2021-012
    Material Weakness Repeat
  • 369848 2021-013
    Material Weakness Repeat
  • 369849 2021-014
    Material Weakness
  • 369850 2021-015
    Material Weakness
  • 946278 2021-001
    Material Weakness
  • 946279 2021-002
    Material Weakness Repeat
  • 946280 2021-003
    Material Weakness
  • 946281 2021-004
    Material Weakness
  • 946282 2021-005
    Material Weakness
  • 946283 2021-006
    Material Weakness Repeat
  • 946285 2021-008
    Material Weakness
  • 946286 2021-009
    Material Weakness
  • 946287 2021-010
    Material Weakness
  • 946288 2021-011
    Material Weakness
  • 946289 2021-012
    Material Weakness Repeat
  • 946290 2021-013
    Material Weakness Repeat
  • 946291 2021-014
    Material Weakness
  • 946292 2021-015
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.81M
14.195 Section 8 Housing Assistance Payments Program $1.01M