Saint Joseph's Tower, Inc.Non-Profit

2023-001 – Eligibility - Tenant File Documentation Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility) Federal program U.S. Department of Housing and Urban Development ●   Supportive Housing for the Elderly (ALN# 14.157) ●   Section 8 Housing Assistance Payments Program (ALN# 14.195) Criteria. Under Section 8 of the Housing Act of 1937 and Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments of applying residents, and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms. Project management is also responsible for disbursing refunds to former tenants within 60 days of move out. Condition. Out of a sample of 8 tenant files, we noted three instances where an EIV was not run for a tenant within 90 days of move in. Additionally, out of a sample of 8 tenant files, we noted one instance where a refund check was not disbursed to the tenant within 60 days of move out. Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements. Effect. As a result of this condition, employees did not follow HUD guideline procedures. While there were no differences in the amount of subsidies allowed upon review of the subsequent EIV compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance. Additionally, a former tenant was not disbursed a refund in a timely manner under the HUD guidelines. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management should strengthen their current policies and follow a documented review process for all new, existing, and former resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure HUD guideline procedures be followed. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

2020-001 ? Vendor Suspension/Debarment Search (repeat) Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Procurement, Suspension, and Debarment) Federal programs U.S. Department of Housing and Urban Development ? Supportive Housing for the Elderly (CFDA# 14.157) Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for determining whether a contractor engaged for services over $25,000 has been suspended or debarred by the federal government as noted at sam.gov. Condition. The Project did not perform a search for suspended or debarred vendors during the year. Cause. Duties and responsibilities for certain office personnel were recently reassigned. As a result of not having a written policy regarding suspension and debarment, the procedure of searching certain vendors at sam.gov was overlooked. Effect. As a result of this condition, potentially suspended or debarred vendors would not have been identified in a timely manner. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management develop and implement a process to check potential vendors in the sam.gov database prior to acceptance or renewal of a contract for each year that the amount is expected to exceed the $25,000 threshold. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

2019-002 ? Vendor Suspension/Debarment Search (repeat) Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Procurement, Suspension, and Debarment) Federal programs U.S. Department of Housing and Urban Development Supportive Housing for the Elderly (CFDA# 14.157) Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for determining whether a contractor engaged for services over $25,000 has been suspended or debarred by the federal government as noted at sam.gov. Condition. The Project did not perform a search for suspended or debarred vendors during the year. Cause. Duties and responsibilities for certain office personnel were recently reassigned. As a result of not having a written policy regarding suspension and debarment, the procedure of searching certain vendors at sam.gov was overlooked. Effect. As a result of this condition, potentially suspended or debarred vendors would not have been identified in a timely manner. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management develop and implement a process to check potential vendors in the sam.gov database prior to acceptance or renewal of a contract for each year that the amount is expected to exceed the $25,000 threshold. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

2019-003 ? Allowable Costs/Cost Principles ? Proper Approval of and Support for Purchases (repeat) Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Allowable Costs / Cost Principles) Federal programs U.S. Department of Housing and Urban Development Supportive Housing for the Elderly (CFDA# 14.157) Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for approving, correctly classifying, and determining allowability of costs prior to disbursement. Condition. Out of 40 cash disbursement selections, we noted 2 instances where competitive price checks were not performed as dictated by the Project Policy. In addition, we noted 10 instances out of 40 in which an invoice was not approved in accordance with policy. Cause. Management has not properly implemented internal control procedures to ensure that all supporting purchase documentation is maintained and that disbursements only occur after proper approvals and, when necessary per Project policy, competitive price checks have been obtained and properly documented. Effect. As a result of this condition, the Project may have been able to secure more favorable pricing terms, or unallowable costs could potentially have been incurred due to the failure to obtain proper review and approval of the underlying invoice. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. We recommend that management properly follow existing procedures and controls in place to ensure that invoice approvals take place prior to making disbursements and that management implement controls to ensure all purchase support and approval documentation is obtained and retained. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

2019-004 ? Eligibility ? Tenant File Documentation (repeat) Finding Type. Immaterial noncompliance; Significant deficiency in internal controls over compliance (Eligibility) Federal programs U.S. Department of Housing and Urban Development Supportive Housing for the Elderly (CFDA# 14.157) Section 8 Housing Assistance Payments (CFDA# 14.195) (passed through from Indiana Quadel) Criteria. Under Section 202 of the National Housing Act of 1959 and the Section 8 Housing Assistance Program, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance for applying residents and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms. Condition. During tenant resident file reviews, we noted 2 instances out of 8 files reviewed in which EIVs were not obtained as required. Additionally, on December 6, 2018, a Program Compliance Specialist from the Indiana Quadel performed a Management and Occupancy Review. The Project received a satisfactory rating; however, there were a multitude of exceptions listed, a selection of which have been summarized below are as follows: 1) The waitlist log did not include the appropriate information as specified by HUD. 2) One instance where there was no credit screening maintained in the tenant file. 3) Two instances where the tenant application was not fully completed. 4) One instance where registered sex offender screening was not completed timely. 5) One instance where the incorrect verification processed was used to verify income from employment. 6) One instance where there was no verification performed on medical expenses which the tenant claimed was not covered by insurance. 7) One instance where a tenant was deemed to be ineligible based on their age which was not identified upon application. 8) Three instances where discrepancies in the Employment Income Verification (EIV) Discrepancy Report were not investigated. 9) Two instances where there was no date on the Social Security benefit letter provided by the resident. 10) One instance where the incorrect Social Security Benefit Claim Number was documented in the tenant file. 11) One instance where the COLA verification increase was missing from the tenant file. 12) One instance where the date of death for a resident was not documented in the tenant file. 13) Four instances where the EIV was missing from the tenant file. Cause. Management does not appear to have internal control procedures in place to properly implement all of HUD?s program requirements. Effect. As a result of this condition, tenants may not have received the correct amount of assistance or charged the proper rent. Documents in the files did not contain all required elements. While no significant differences in resulting tenant subsidies received were noted by the Indiana Quadel, the lack of effective internal controls in this area could lead to future significant actual noncompliance. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no significant unallowable expenditures were noted. Recommendation. We recommend that management develop a formal and documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

2019-005 ? Improper Management Fees Finding Type. Immaterial noncompliance, Significant deficiency in internal controls over compliance (Allowable Costs/Cost Principles) Federal programs U.S. Department of Housing and Urban Development Supportive Housing for the Elderly (CFDA# 14.157) Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for the accurate recording of management fees in accordance with HUD. Condition. Management fees were originally accrued in excess of the amount approved by HUD. Cause. Management does not appear to have internal control procedures in place to properly implement all of HUD?s program requirements. Effect. As a result of this condition, management fees were not originally accrued at the amount approved by HUD. The excess accrual was reversed by management and none of this excess was ever paid to the management agent. Recommendation. We recommend that management implement controls to ensure that managements fees are being properly recorded in accordance with HUD. View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.

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