BOSTON TREMONT HOUSING DEVELOPMENT FUND CORPORATIONNon-Profit

Finding No. 2024-001- Tenants are not recertified timely Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our review of 25 lease files we noted the following deficiency: 1 file did not have timely recertification of tenants and income verification documentation was performed later than the required recertification date. Cause Management's policies with respect to the determination of eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs N/A Identification as a Repeat Finding Repeat finding 2023-001 Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. HUD Auditor Noncompliance Code R- Section 8 program administration Uniform Guidance Auditor Noncompliance Code E- Eligibility Finding Resolution Status: In process Reporting Views of Responsible Officials Management has addressed the issue by recertifying the tenants and does not expect late recertifications to occur again.

Finding No. 2024-002- Unauthorized loans from project assets Criteria The terms of the regulatory agreement/HAP contract require payments/repayments of related party fees/loans to be limited to available surplus cash computed on a semi-annual or annual basis unless approved by HUD. Condition During the year ended December 31, 2024, the project paid expenses in the amount of $83,761 on behalf of an affiliate from project cash without HUD approval. Cause Procedures were not in place to ensure that distributions of cash were limited to available surplus cash computed in accordance with HUD regulations. Effect or Potential Effect The payments/repayments of $83,761 were unauthorized distributions and therefore considered to be questioned costs. Questioned Costs $83,761 Identification as a Repeat Finding N/A Recommendations Management should implement procedures to limit distributions of project cash to the annual surplus cash calculation amount required by the regulatory agreement/HAP contract. Management should immediately reimburse the project's cash account for the unauthorized distribution. HUD Auditor Noncompliance Code G- Unauthorized loans from project assets Uniform Guidance Auditor Noncompliance Code B- Allowable Costs/Cost Principles Finding Resolution Status: Resolved. Reporting Views of Responsible Officials The Corporation agrees with the finding and the auditor's recommendations have been adopted. As of the report date and subsequent to the statement of financial position date, the $83,761 was repaid back to the Corporation.

C. Federal Award Findings and Questioned Costs Finding No. 2023-001- Tenants are not recertified timely Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our review of 26 lease files we noted the following deficiency: 5 files did not have timely recertification of tenants and income verification documentation was performed later than the required recertification date. Cause Management's policies with respect to the determination of eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. . Reporting Views of Responsible Officials Management has addressed the issue by recertifying the tenants and does not expect late recertifications to occur again. Auditor Noncompliance Code E- Eligibility

Criteria: Compliance Requirement for Section 8 Project-Based Cluster Eligibility par. 1.d states that the public housing agency or owner, as applicable, must reexamine family income and composition at least once every 12 months and adjust the total rent payment and housing assistance payment as necessary. Condition: During our testing of tenants? eligibility to receive rental assistance, we noted that the rental assistance amount reported on the vouchers for the month of May and June for one (1) tenant did not agree with the amount the tenant is eligible to receive from the re-certification process. This resulted in an overpayment made to Boston Tremont Housing Development Fund Corporation by the federal funding agency. The total overpayment amount was not material to the major program. Questioned Costs: The extrapolated excess amount Boston Tremont Housing Development Fund Corporation received pertaining to the finding is below the reporting threshold of $25,000. Context: This condition was identified through our internal control and compliance testing of eligibility. Effect: This condition resulted in Boston Tremont Housing Development Fund Corporation receiving payments from the federal funding agency in excess of the amount eligible to receive. Cause: Policies and procedures in place over the tenant re-certification process to ensure that the amount of housing assistance a tenant is eligible to receive is properly reported on the housing assistance payments vouchers submitted to HUD for reimbursements was not properly adhered to. Recommendation: We recommend that Boston Tremont Housing Development Fund Corporation implement additional controls over the tenant re-certification process to ensure that the amount claimed on the HUD vouchers represents the amount Boston Tremont Housing Development Fund Corporation is eligible to receive, and any adjustments are captured timely. Views of Responsible Official and Planned Corrective Actions: Boston Tremont Housing Development Fund Corporation agrees with the federal award finding identified in the audit. Boston Tremont Housing Development Fund Corporation's response to this finding is described in the accompanying management's planned corrective action plan.

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