THE VILLAGE OF BRUSH PARK MANOR PARADISE VALLEY

Finding Type: Immaterial noncompliance with major program requirements Significant deficiency in internal control over compliance Title and Assistance Listing Number of Federal Program 14.157, Supportive Housing for the Elderly Project Rental Assistance Contract and Capital Advance Finding Resolution Status In process Information on Universe and Population Size The total population size is the total number of units, which is 113. Sample Size Information A total of 2 out of the 12 samples Identification of Repeat Finding and Finding Reference Number N/A Criteria HUD requires tenant files to be maintained to support tenant eligibility and for the Organization to utilize EIV, including having controls in place to ensure EIV is being properly utilized. Statement of Condition The Organization failed to maintain the proper EIV and tenant file documentation. Cause The Organization failed to maintain the proper EIV document to one of the tenants tested and could not provide tenant file information related to another tenant. Effect or Potential Effect EIV was not properly kept within the tenant file, and tenant eligibility could not be supported. Auditor Noncompliance Code S Internal control deficiency Reporting Views of Responsible Officials Management will implement internal control procedures to ensure that the EIV system is properly utilized and tenant files are properly maintained to document the tenant's eligibility. Recommendation Management should implement proper procedures and controls to ensure EIV is properly utilized and tenant file information is properly maintained to support tenant eligibility. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations Management acknowledges the noncompliance and related internal control deficiency over compliance and will implement proper procedures and controls to ensure EIV is properly utilized and tenant file information is properly maintained to support tenant eligibility. Response Indicator Agree

Finding Type - Immaterial noncompliance with major program requirements; Title and CFDA Number of Federal Program - Supportive Housing for the Elderly - Project Rental Assistance Contract and Capital Advance (CFDA #14.157); Finding Resolution Status ? Resolved; Information on Universe and Population Size - N/A; Sample Size Information - N/A; Criteria - Per the terms of the originally approved HUD withdrawal from the replacement reserve to cover COVID-related sanitation expenditures for the project, the Organization was required to repay the $17,920 withdrawal within ten days of receipt of CSP funds received on the September 2020 voucher.; Statement of Condition - The Organization received CSP funds to cover COVID-related sanitation exenditures that had originally been funded with an HUD-approved disbursement from the reserve for replacement. The funds were not re-funded into the replacement reserve until June 30, 2021, outside of the 10-day requirement by HUD for repayment.; Cause - Since the replacement reserve activity was not reconciled until normal management year-end close-out procedures, the expiration of the 10- day repayment window was not discovered timely.; Effect or Potential Effect - The replacement reserve was underfunded by $17,920 from September 2020 to June 30, 2021, when the amount was returned to the replacement reserve account.; Auditor Noncompliance Code - N - Reserve for Replacements Deposits; Reporting Views of Responsible Officials - Management was aware of the requirement to repay the loan from the reserve for replacement account if the CSP funding was approved and 10 days after such receipt. Management agrees with the finding. The $17,920 was returned to the reserve for replacement on June 30, 2021.; Recommendation - All required repayments to the reserve for replacement account should be made timely in accordance with HUD stipulations.; Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management does have a process in place to reconcile reserve for replacement activity and was aware of the requirements but did not adhere to them on a timely basis as noted. As of year end the replacement reserve was properly funded.; Response Indicator ? Agree; Completion Date - June 30, 2021; Response - Management acknowledges that it did not repay the reserve for replacement withdrawal received timely with CSP funds subsequently received to reimburse the same approved COVID sanitation expenditures, but did repay the $17,920 to the reserve for replacement account on June 30, 2021.