Woodview of Cincinnati, Inc.

S3800-010 Finding Reference Number 2023-1 S3800-015 Type of Finding Federal Award Finding S3800-020 Criteria Compliance with the Regulatory Agreement stipulates that required deposits have to be made into the reserve for replacements. S3800-030 Statement of Condition The Organization did not meet the required monthly deposits needed into the reserve for replacements. S3800-035 Auditor Non-Compliance Code N - Reserve for Replacement Deposits S3800-037 FHA/Contract Number 046-HD024 S3800-038 Questioned Costs $3,573 S3800-050 Context The Organization did not have enough liquid funds to make the monthly reserve for replacement deposits. S3800-060 Effect Not making required deposits could result in insufficient funds to cover repairs and replacements S3800-070 Cause The Organization does not have enough liquid funds to make the monthly reserve for replacement deposits. S3800-080 Recommendation The Organization should deposit $3,573 into the reserve for replacements.

Condition: Sufficient funds were not available to make three months of required deposits in the replacement reserve. Criteria: Monthly deposits of $535 are required to be deposited in the replacement reserve account according to the HUD regulatory agreement. Cause: Cash flow is not properly managed in order to meeting the immediate and future needs of the Organization such as properly escrowing funds in the replacement reserve. Effect: $1,605 in back due deposits are due to the replacement reserve in the coming fiscal year in additional to the required monthly payments. Recommendation: Management personnel should monitor cash flows on a monthly basis in line with budget and monthly required deposits in order to appropriately meet the current and future cash flow needs of the property. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the lack of cash flow management. The onsite and regional manager plan to work together to perform better monthly review of expenses compared to budget and work to fund the delinquent and current deposits as soon as cash is available.

Condition: The Organization did not make the surplus cash deposit of $6,606 to the residual receipts account within 60 days after year-end as required by HUD. Criteria: Within 60 days at the end of each fiscal year, surplus cash must be paid to the residual receipts account. Cause: The management company did not calculate the surplus cash and remit the deposit within 60 days. Instead, the management company waited until the audit was completed to remit the surplus cash deposit. Effect: The cash deposit to the residual receipts account was not made timely. Recommendation: The Organization should perform its own calculation of surplus cash and remit required deposits to the residual receipts account within 60 days after year-end as required by HUD. Views of Responsible Officials and Planned Corrective Actions: Corrected. The Organization remitted the required amount of surplus cash to the residual receipts account. In the future, management will try to remit deposits in a timely manner, within 60 days after yearend.

Condition: Both of the two tenants tested had either noncompliant leases or incorrect rent calculations during tenant certifications. This included a lease signed by one tenant that was for the wrong federal program and an improper calculation of the other tenant?s rent. One of the two tenant files selected for testing could not be located during the first day the auditors were onsite and was subsequently provided to the auditors. Criteria: The Organization receives HUD-assisted rents and must calculate the subsidy and tenant portions of rents using accurate and complete information provided by the tenant and by following the HUD rent calculation procedures and sign all necessary federal program directed documentation as required by HUD. Tenant files must be properly maintained, accessible, and secured by management company personnel. Cause: The on-site manager responsible for the tenant files failed to prepare the correct lease according to the major federal program that applies to this Organization and did not perform the correct calculation of the tenant?s rent. No explanation was given as to why the on-site manager was unable to locate one of the tenant?s files during the first visit by the auditors. Effect: Tenants were affected as follows: 1. One tenant will need to sign a new lease to ensure the file has a lease agreement in compliance with the major federal program applicable to this Organization. 2. One of the tenant?s medical expense deduction was $460 higher than the supporting documentation which resulted in a $10 per month increase in the tenant?s rent. Recommendation: The Organization should require more qualified personnel perform tenant file compliance. A second person should be reviewing files for compliance either on a test basis or for all files. All files of current tenants should be secured and maintained in one location. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the issues and lack of control environment. Management has since put in place a more qualified individual to be responsible for the compliance of tenant files. Management plans to review all files and correct all errors. Tenant files will be maintained at the office at Judson Terrace, Inc.

Condition: Both of the two tenants tested did not have any unit inspections between October 1, 2020 and December 31, 2021. Property management believes that only move in and move out inspections were performed during that time period. Criteria: The Organization is required to perform regular inspections and repairs in order to ensure appropriate living conditions and safe guarding of the Organization?s assets. Cause: Neither the current or previous on-site manager performed unit inspections. HUD has not performed an onsite inspection since July 2016 . Effect: There is potential for the property to go into disrepair or repairs to be more costly in the future because regular maintenance was not done on the property. The only repairs currently being completed are items reported by tenants and as identified by move in or move out inspections. Recommendation: The Organization should perform at least annual unit inspections and ensure repairs are performed in a timely fashion. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the issues and lack of control environment. The onsite manager plans to perform unit inspections on all units in February 2022.

Condition: The Organization did not make the deposit within 60 days after the year ended December 31, 2021 as required by HUD. Recommendation: The Organization should perform its own calculation of surplus cash and remit required deposits to the residual receipts account within 60 days after year-end as required by HUD. Views of Responsible Officials and Planned Corrective Actions: A deposit to the residual receipts reserve for the financial results for the year ended December 31, 2020 was made in March 2021 and no further amounts are due.

2020-001 INTERNAL CONTROL DEFICIENCY Condition: The Organization did not identify the recording of duplicate invoices prior to vendor payments and did not identify the duplicate expenses during financial statement reviews. Criteria: The Organization has a responsibility to properly approve all invoices before vendor payments and to review the financial statements on a regular basis to ensure accuracy of the financial data. Cause: The duplicate payments were a result of several failures in the control process including paying vendors based on summary statements instead of detailed invoices, and insufficient review of invoices and financial results at the end of each fiscal period. Effect: The effect was $3,748 of duplicate payments made to vendors. Recommendation: We recommend the management company communicate written policies with clearly defined roles to its employees regarding approval of vendor payments and financial statement reviews. Views of Responsible Officials and Planned Corrective Actions: The management company agrees with the auditors' findings. The management company had significant employee turnover in both the accounts payable and regional manager positions during the fiscal year. Additional training and review procedures will be discussed and communicated to the responsible parties. The management company will contact vendors to obtain refunds for duplicate invoice payments. It will also review its current procedures and clearly define rules with its employees to prevent errors in the future.

Condition: The Organization did not make the deposit within 60 days after yearend as required by HUD. Criteria: Surplus cash should be remitted to the residual receipt deposits due within 60 days after yearend if surplus cash exists at the end of the fiscal year. Cause: The Organization did not calculate the surplus cash and make the deposit by March 1, 2020 (60 days after yearend). Effect: The deposit was made June 3, 2020, which was outside the required statutory requirements of HUD. Context: The management company relies on the audit to determine if amounts are due to the residual receipts and does not perform its own calculation. Recommendation: The Organization should perform its own calculation of surplus cash and remit required deposits to the residual receipts account within 60 days after yearend as required by HUD. Views of Responsible Officials and Planned Corrective Actions: A deposit to the residual receipts account was made June 3, 2020 and no further amounts are due.

FINDINGS-FINANCIAL STATEMENT AUDIT SIGNIFICANT DEFICIENCY 2019-001 TENANT CERTIFICATION AND COMPLIANCE WITH HUD CONTRACT REQUIREMENTS Condition: Both of the two tenants tested had noncompliant files. The issues included lack of supporting documentation for income and tenant signatures on required recertification forms. Criteria: Organizations receiving HUD-assisted rents must calculate the subsidy and tenant portions of rents using accurate and complete information provided by the tenant, and by following the HUD rent calculation procedures and documentation requirements. Cause: The manager who completed the tenant files lacked the skill to complete the files correctly. There was no second party reviewing the files in total or on a sample basis. Effect: Management has since reviewed all files and believes that almost all files were impacted. Recommendation: The Organization should have more qualified personnel performing tenant file compliance. It should also have a second person reviewing files for compliance either on a test basis or for all files. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the issues and lack of control environment. Management has since put in place a qualified individual to be responsible for the compliance of tenant files. Management has reviewed all files and corrected errors that could be corrected. FINDINGS AND QUESTIONED COSTS-MAJOR FEDERAL AWARD PROGRAMS AUDIT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2019-001 U.S. Department of Housing and Urban Development, Supportive Housing for Persons with Disabilities, CFDA No. 14.181 and Section 8 Project Rental Assistance, CFDA No. 14.195. Significant Deficiency: See above. Amount not quantified.