Edward Romero Terrace

FINDING No. 2025-001: Section 202 - Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Forty-three tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require: • Verification of initial income through the use of EIV reports within 90 days of move-in; • All lease addendums should be signed by the tenant and owner. Statement of Condition: Of the tenant files selected: • One tenant file did not contain verification of the initial income through the use of EIV reports; • Two tenant files were missing the tenant’s signatures on all lease addendums. Cause: The Project did not perform and/or maintain appropriate tenant eligibility and income verification documentation in accordance with HUD requirements. Effect or Potential Effect: Unable to verify tenant eligibility and improper maintenance of tenant files as it relates to lease addendums. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials:The Project agrees with the finding and the auditor's recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that all required tenant eligibility steps are performed in accordance with HUD regulations and to ensure that all documentation related to tenants is properly executed and maintained. Response Indicator: Agree. Completion Date: 9/30/2026 Response: Staff training has been provided with additional HUD training inclusive of eligibility requirements and included in monthly reporting procedures.

FINDING No. 2024-001: Section 202 - Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Forty-four tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2023-001. Criteria: HUD regulations require management to maintain tenant files containing: • Move-in inspections are required and should be retained in the tenant file. • All lease addendums should be signed by the tenant and owner. • Form HUD-50059 certifications to be signed prior to the effective date. Statement of Condition: Of the tenant files selected: • One tenant file was missing move-in unit inspection report. • Two tenant files were missing signatures on the house rules addendums. One tenant file was missing signature on the pet policy addendum. • One tenant file was missing a signed HUD-50059 form. Cause: The Project did not perform and/or maintain appropriate tenant eligibility documentation in accordance with HUD requirements. Effect or Potential Effect: Improper maintenance of tenant files as it relates to the move-in inspections, lease addendums, and recertification forms. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor's recommendations have been adopted. Recommendation: The Project should implement procedures to ensure all documentation related to tenants are properly executed and maintained for move-in inspection reports, lease addendum items and tenant recertification. Response Indicator: Agree. Completion Date: 01/02/2025 Response: Monthly reminders are being sent to all managers to run their EIV reports for the month. In addition, random files are being reviewed by compliance to ensure EIV reports are pulled, unit inspections performed, and required documentation is complete and accurate.

FINDING No. 2023-001: Section 202 - Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Forty-three tenants. Same Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require: • Timely verification of tenant’s current and initial income through the use of Enterprise Income Verification (EIV) reports. • Form HUD-50059 certifications to be signed prior to the effective date. • Security deposit support be maintained. Statement of Condition: Of the tenant files selected: • Two tenant files did not contain verification of initial income through the use of EIV reports. • Two tenant files had the form HUD-50059 signed after the effective date. • One tenant file did not contain the complete criminal background check. • One tenant file did not have the apartment application signed by the tenant. • Two tenants files did not contain security deposit support. Cause: The Project did not perform and/or maintain appropriate tenant eligibility documentation in accordance with HUD requirements. Effect or Potential Effect: Improper maintenance of tenant files and unable to verify tenant eligibility and cost of assistance, and residency may be disallowed. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendation will be adopted. Auditor Non-Compliance Code: R – Section 8 Program Administration. Recommendation: The Project should implement procedures to ensure the manager verifies eligibility by obtaining all required documents for potential tenants and maintain support for tenant income verification through the EIV system in a timely manner. Response Indicator: Agree. Completion Date: 09/30/2024 Response: Monthly reminders are being sent to all managers to run their EIV reports for the month. In addition, random files are being reviewed by compliance to ensure EIV reports are pulled and required documentation is complete and accurate.

FINDING No. 2022-001: Section 202 - Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Total rent revenue from effective date through September 30, 2022. Sample Size Information: All monthly PRAC requests from effective date through September 30, 2022. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, a HUD approved rent change must be executed as of its effective date, and all earned revenue recorded in the correct period. Statement of Condition: The Project did not implement the HUD approved rent change to its monthly PRAC requests as of the July 1, 2022 effective date, resulting in a $13,155 omission. Cause: The Project did not follow HUD regulations for timely applying the gross rent change, resulting in an underpayment of PRAC for each unit. Effect or Potential Effect: The Project did not request $13,155 of PRAC funding in the audit period, nor record the receivable at year end. An audit adjustment was posted to reflect the correct PRAC revenue for the year. Auditor Non-Compliance Code: R ? Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendation has been adopted. Recommendation: The Project should comply with HUD regulations for executing the required rent change as of its effective date and all earned revenue recorded in the correct period. Response Indicator: Agree. Completion Date: 12/1/2022 Response: Management has provided additional training on HUD regulations, inclusive of the timely processing of authorized rent changes.

FINDING No. 2021-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Forty-six tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires timely verification of tenant?s initial income through the use of Enterprise Verification (EIV) reports with the corresponding documentation maintained. Statement of Condition: The Project did not perform and/or maintain the initial EIV for one tenant. Cause: The Project did not adhere to HUD regulations for initial eligibility and did not perform timely income verification. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance and residency may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Administration Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should implement procedures to ensure the Project verifies initial tenant income through the EIV system in a timely manner and maintain all required tenant documentation. Response Indicator: Agree. Completion Date: 6/2/2021 Response: The former community manager was not adhering to HUD rules and regulations. The current staff has received additional HUD training on tenant file maintenance and reporting.

FINDING No. 2020-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Forty-seven tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires: ? Timely verification of tenant?s current and initial income through the use of Enterprise Income Verification (EIV) reports. ? Accurate utilization of verified income on tenant?s HUD form 50059. ? Performing and retaining background checks prior to acceptance as new tenants in the tenant file. ? Form 50059 certifications to be signed prior to the effective date. Statement of Condition: Of the tenant files selected: ? Two tenant files did not contain verification of initial income through the use of EIV reports. ? One tenant file did not contain verification of current cert income through the use of EIV reports. ? One tenant?s HUD form 50059 utilized inaccurate tenant income resulting in incorrect rental charges. ? One tenant file did not contain a background check. ? One form 50059 was signed after the effective date. Cause: The Project did not maintain income verification and background check documentation, and a signature was obtained after the effective date and inaccurate income figures were utilized on HUD form 50059. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance and residency may be disallowed. Also, tenant assistance is overcharged. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure the Project verifies eligibility by obtaining all required documents for potential tenants and adequately maintains tenant files. Also, accurate tenant income should be used on HUD form 50059. Response Indicator: Agree. Completion Date: 9/30/2021 Response: The former community manager was not adhering to HUD rules and regulations. The current staff has received additional HUD training on tenant file maintenance and reporting.

FINDING No. 2020-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: All management fee expenses. Sample Size Information: All management fee expenses. Identification of Repeat Finding and Finding Reference Number: Yes, 2019-002. Criteria: As required by HUD, the Project shall only use funds as specified in the Regulatory Agreement and owes the management company fees at the rate specified in the Project Owner?s/Management Agent?s Certification (Form HUD-9839-B). Statement of Condition: As a result of an expired Form HUD-9839-B, the Project has been overcharged management fees, resulting in an unauthorized loan to the Management Company. Cause: The Project?s Form HUD-9839-B expired and a new one was not prepared nor approved by HUD. Effect or Potential Effect: The Project has made an unauthorized loan to the management company as a result of overpaying management fees of $16,200. Auditor Non-Compliance Code: J ? Unauthorized Management Fees. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations will be adopted. Recommendation: The Project should implement procedures to monitor the expiration of HUD required documents to ensure timely preparation and approval. Response Indicator: Agree. Completion Date: 9/30/2021 Response: An owner signed HUD Form 9839-B was submitted to HUD for approval. However, we didn?t received the approval until 11/04/2020.

FINDINGS AND QUESTIONED COSTS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT FINDING No. 2019-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Fifty-two tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires: ? Timely verification of tenant?s current and initial income through the use of Enterprise Income Verification (EIV) reports. ? Performing and retaining background checks prior to acceptance as new tenants in the tenant file. ? Obtaining signed 50059 certifications before the effective date. Statement of Condition: Of the tenant files selected: ? Six tenant files did not contain verification of initial income through the use of EIV reports. ? One tenant file did not contain a background check. ? One tenant file?s 50059 was signed after effective date. Cause: The Project did not perform nor maintain income verification, background checks, and signed 50059 certifications. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance and residency may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations will be adopted. Recommendation: Implement procedures to ensure the Project verifies eligibility by obtaining all required documents for potential tenants and adequately maintains tenant files. Response Indicator: Agree. Completion Date: 11/12/2019 Response: Current staff has received additional training on the proper maintenance of tenant files and the timely verification of EIV reports.

FINDING No. 2019-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: All management fee expenses. Sample Size Information: All management fee expenses. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD, the Project shall only use funds as specified in the Regulatory Agreement and owes the management company fees at the rate specified in the Project Owner?s/Management Agent?s Certification (Form HUD-9839-B). Statement of Condition: As a result of an expired Form HUD-9839-B, the Project has been overcharged management fees, resulting in an unauthorized loan to the Management Company. Cause: The Project?s Form HUD-9839-B expired and a new one was not prepared nor approved by HUD. Effect or Potential Effect: The Project has made an unauthorized loan to the management company as a result of overpaying management fees of $16,200. Auditor Non-Compliance Code: J ? Unauthorized Management Fees. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations will be adopted. Recommendation: The Project should implement procedures to monitor the expiration of HUD required documents to ensure timely preparation and approval. Response Indicator: Agree. Completion Date: 9/30/2020 Response: Management has retained the services of a Consulting firm who is currently in the process of renewing all expired HUD documents. They will also ensure that any upcoming documents are renewed timely.

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