ALLIES HOMES 2005, INC.

Program: U.S. Department of Housing and Urban Development Supportive Housing for Persons with Disabilities (Section 811) Criteria or specific requirement: Per the Consolidated Audit Guide for Audits of HUD Programs Handbook, organizations who participate in HUD?s rent subsidy program are responsible for recertifying tenants annually in accordance with HUD requirements. Condition: The Organization did not recertify each tenant in a timely manner during the fiscal year under audit. Further, proof of income verification was missing for two tenants. Effect: Inadequate controls and resources over this area of compliance resulted in the following conditions: - The Organization did not maintain current certifications for each tenant selected as part of our sample. - Housing Owner?s Certification and Application for Housing Assistance Payments vouchers were not submitted timely, causing a delay in final revenue being recorded for the fiscal year. - The Organization was not paid for several months of services at year end due to the delay in vouchers being submitted, causing a large accounts receivable balance at June 30, 2021. Cause: Due to personnel issues and the continued impact of the COVID-19 pandemic, the tenant recertification process was significantly delayed. Recommendation: The Organization should ensure compliance with HUD requirements as set forth in the Consolidated Audit Guide for Audits of HUD Programs Handbook. Tenant recertifications should be completed in a timely manner to ensure that there is no significant delay in reporting in future years. Views of responsible officials (and planning corrective actions): Management agrees with the recommendations provided.

Identifying Number: 2021-001 and 2021-002 Finding: The Organization did not recertify each tenant in a timely manner during the fiscal year under audit in accordance with HUD requirements. Due to delays in recertification, the Organization did not submit Housing Assistance Payment vouchers for eligible tenants in a timely manner. Further, proof of income verification was missing for two tenants. Contact Person Responsible for Corrective Action: Richard Manall, CFO Corrective Action Taken or Planned: HUD tenant recertifications are now the responsibility of the Housing Finance Administrator and is part of the Finance department. This position is overseen by the Accounting Manager and the Controller with monthly status inquiries and billing and account receivable analysis. Anticipated Completion Date: HUD tenant recertifications as of January 31, 2022, are current and up to date. Tenant voucher billings, due to the ten-day turn around billing cycle, will be completed by April 2022.