Moffat Gardens Housing Development Fund Company, Inc.Non-Profit

Finding 2021-001 Special Tests and Provisions: Replacement Reserve CFDA Number Name of the Federal Program 14.157 Supportive Housing for the Elderly Criteria In accordance with the HUD regulatory agreement, the Entity is required to make 12 monthly payments of $5,503.41 to the reserve for replacement account. Condition Only 9 monthly payments were made during the year. Cause Due to a delay in HAP contract renewal, there was not sufficient available cash in the operating account to make the required deposits and automatic deposit was suspended by the bank to prevent over-drafting the operating account. Context When performing our audit, we noticed that the Entity only made 9 of the 12 monthly payments during the year. Questioned Costs None Effect The Entity did not comply with replacement reserve requirements of its regulatory agreement. Recommendation We recommend that the Entity deposit $16,510 for the 2021 missed deposits. Views of the Responsible Official See attached Corrective Action Plan.

Finding 2021-002 Special Tests and Provisions: Replacement Reserve CFDA Number Name of the Federal Program 14.157 Supportive Housing for the Elderly Criteria In accordance with the Entity?s HUD regulatory agreement, HUD authorization is required for all withdrawals from the replacement reserve account. Condition One withdrawal of $9,350 was made during 2021 without HUD authorization. Cause Due to a change in personnel at the Entity, a withdrawal from replacement reserve account was made without HUD authorization. Context When performing our audit, we tested all withdrawals, from the reserve for replacement account and noted that one withdrawal during the year was made without HUD authorization. Questioned Costs None Effect The Entity did not comply with HUD?s replacement reserve requirements of its regulatory agreement. Recommendation We recommend that the Entity deposit $9,350 for the 2021 unauthorized withdrawal and implement procedures to ensure all withdrawals receive appropriate authorization. This would include limiting the personnel that can transfer funds from replacement reserve account. Views of the Responsible Official See attached Corrective Action Plan.

Finding 2021-003 Reporting CFDA Number Name of the Federal Program 14.157 Supportive Housing for the Elderly Criteria The Entity?s Uniform Guidance submission to the Federal Audit Clearinghouse ("FAC") was due within nine months of its year end. Condition The Entity?s Uniform Guidance submission to the FAC was not filed on time within nine months of the end of its fiscal year. Cause There were personnel changes at the management company which caused a delay in concluding the audit on a timely basis. Context When performing our audit we noted that the Uniform Guidance submission to the FAC was not filed on a timely basis. Questionable Costs None noted Effect The Entity was not in compliance with the requirement to complete the filing for the Entity Uniform Guidance within nine months of its year end, and therefore, the Entity cannot be considered a low risk auditee. Recommendation We recommend the Entity's Uniform Guidance submission to the FAC be filed within nine months of its year end as required. Views of the Responsible Official See attached Corrective Action Plan. Section IV ? Summary of Prior Year?s Audit Findings There are no prior year findings.

Finding 2019-001 Project Rental Assistance billing U.S. Department of Housing and Urban Development CFDA Number Name of the Federal Program 14.157 Supportive Housing for the Elderly Criteria In accordance with the Entity?s project rental assistance contract and HUD regulations, rents may only be billed for units occupied by qualified tenants. Condition The Entity has billed and collected rents for tenants past their move-out date. Context During our gross rent calculation, it was noted total income was higher than allowed rental income per contract rent. It was determined that these increased balances were due to HUD voucher billing subsequent to the tenant moving out. Effect The Entity has over billed HUD for PRAC subsidy. Cause Internal controls currently in place over billing and processing of tenant move outs are not being properly applied. Recommendation Although the excess billing was unintentional and due to human error, we recommend the management company evaluate its internal controls and implement policies to mitigate the chance over billing for tenants no longer in the property. Views of responsible officials and planned corrective action See Corrective Action Plan in Appendix A.

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