Finding Text
Department of Housing and Urban Development Section 8 Housing Assistance Program, AL 14.195 Criteria HUD regulations require the project’s management agent to have fidelity bond coverage equal to the greater of $50,000 or the value of two months gross potential rent. If the policy covers more than one project, this minimum must be computed using the project with the highest gross potential rent. Condition The Owner did not provide evidence of fidelity bond coverage as required by HUD regulations. Cause The Owner was unable to provide evidence of the required minimum coverage. Effect Management may have coverage below HUD’s required minimum in violation of HUD regulations. Questioned Costs: None Context The Owner did not provide evidence of fidelity bond coverage to the audit team. Identification as a Repeat Finding This finding is not a repeat finding Recommendation Management should obtain fidelity coverage as required by HUD regulations immediately or should provide evidence sufficient fidelity bond insurance was obtained through the year ended September 30, 2023. Views of Responsible Officials