MAYWOOD SENIOR CITIZENS HOUSING CORP.

S2700-005 - Finding Reference Number: 2021-001 S2700-010 ? Statement of Conditions The Board of Trustees Management discovered $561,417 of excess unauthorized salaries, excess bonuses and excess pension payments were paid over the period between 2016 and 2021. S2700-020 ? Criteria The corporation must safeguard assets and have an effective system of internal control in place. S2700-030 ? Effect or Potential Effect Without the funds available for operations, the development might not meet its mandate to provide safe, decent and sanitary housing. Also, the misappropriation of the funds understates the surplus cash calculation. S2700-040 ? Cause Office manager overrode the Board of Trustees maximum limits upon authorized salaries, bonuses and pension payments paid over the period between 2016 and 2021. S2700-050 - Recommendation Review internal controls surrounding oversight and employee compensation. Hire an independent outside professional management company and institute recommended changes. S2700-055 ? Auditor Non Compliance Code: S ? Internal Control Deficiencies S2700-065 ? Amount of Questions Costs: $561,417 S2700-057 ? FHA/Contract Number: 031-EH034 S2700-058- Questioned Costs: $561,417 S2700-100 ? Reporting Views of Responsible Officials On November 17, 2021, in the course of the preparation of the 2021 annual audit, the Housing Corporation?s auditor, Richard Bloom of Bloom and Bloom, LLP brought to the attention of the Board of Trustees (hereinafter ?Board?) of the Housing Corporation certain financial discrepancies with respect to salaries, bonuses and pension payments. As a result, the Board undertook a preliminary investigation. Based on an examination of the salaries and bonuses approved by the Board, the employee?s W-2?s, the payroll ledger sheets, and pension payments for the period covering 2016 to 2021, the Board?s preliminary investigation revealed overpayments in salaries, bonuses and pension payments totaling $561,417. and other financial mismanagement attributable to the former Manager, Elaine Benanti. The former manager was offered an opportunity to explain these overpayments and other financial mismanagement but failed to avail herself of this opportunity and was unavailable for comment. It was not until the completion of the preliminary investigation undertaken by the Board of Trustees on February 1, 2022, that the Board of Trustees became aware (and first learned) of the full extent and details of these overpayments and irregularities in the current and prior periods. Previous audit reports did not indicate any irregularities or overpayments. Upon learning of such overpayments and financial irregularities, the Board of Trustees had undertaken the necessary steps to institute the recommended changes by taking control over the bank accounts, terminating the employment of the former manager, retaining a new management firm, and correcting the salary payments going forward from January 1, 2022. The auditor was requested by the Board of Trustees to undertake a more exhaustive audit to determine whether there were any additional financial discrepancies. In addition, the Board of Trustees notified both the Bergen County Prosecutor?s Office and the HUD Office of Inspector General of the overpayments and financial discrepancies. Moreover, the Board alerted its insurance carrier of these unauthorized overpayments and filed a claim for the recovery of same. S2700-070 ? Concur or Do Not Concur with this Finding: Concur with the finding S2700-075 ? Agreement or Disagree with Auditor Recommendations: Agree S2700-080 ? Completion Date or Proposed Completion Date: June 21, 2022 S2700-090 ? Actions Taken or Planned on this Finding When the Board of Trustees first learned of the irregularities in November of 2021, they subsequently terminated the office manager, soon thereafter retained an independent outside professional management company and instituted recommended changes. S2700-110 ? Contact Person: Nancy Jengo, President of Board of Trustees (term commenced January 2020)