Nutley Episcopal Senior Housing, Inc.

Section III - Federal Award Findings and Questioned Costs Finding 2019-001 - Significant Deficiency Tenant Selection Plan - Income Targeting Requirement Criteria: Pursuant to 24 CFR 5.653(c) of the Uniform Guidance, for each project assisted under a contract for project-based Section 8 assistance, the auditee must lease not less than 40% of the dwelling units that become available for occupancy in any project fiscal year to extremely low-income families. Condition: The Project did not meet income targeting requirement for the year ended December 31, 2019. Cause: The Project's tenant selection plan did not operate effectively to ensure that income targeting requirement is met. Effect: As a result of finding 2019-001, the Project did not comply with after mentioned regulation. Recommendation: We recommend the Project review its tenant selection plan and implement methods to comply with income-targeting requirements. Views of Responsible Officials and Planned Corrective Actions: The Project's management will review composition of property's current waiting list and evaluate expected admissions. Appropriate resources will be deployed to assure that proper technical oversight and review of the move-in activities. In addition, procedures will be developed to assure income-targeting requirements are met.