MERCER COUNTY HOUSING ASSOCIATES LLCLocal Government

Finding 2024-001 U.S. Department of Housing and Urban Development Section 8 Project-Based Cluster: Project Based Rental Assistance - ALN 14.195 Special Tests and Provisions Condition: During our testing of the waiting list, we noted two applicants out of a sample of 42 that were not placed on the waiting list in the correct order at the time of admission. Mercer County Housing Associates LLC (Company) did not have internal controls in place to identify the incorrect placement of the applicants on the waiting list. Criteria: Management is responsible for establishing internal controls to ensure that at the time of admission, the applicant met the preference criteria that determined the applicant’s place on the waiting list. Management must maintain information that permits the Company to select participants from the waiting list in accordance with their admission policies (24 CFR section 982.204). Cause: The incorrect date and time were entered into the tenant management system for two applicants due to a clerical error and internal controls in place were not followed to ensure the accuracy of the application information entered into the tenant management system. Effect: Two applicants were incorrectly placed on the waiting list and, in one instance, the applicant was housed out of order. Repeat Finding: No Questioned Costs: Unknown Recommendation: The Company should follow the internal controls in place to ensure the accuracy of the application information entered into the tenant management system in order to ensure correct placement on the waiting list. Views of responsible officials and planned corrective action: Management agrees with the finding. See separate corrective action plan.

U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects ALN 14.155 Eligibility Condition: During our review of HUD-50059, Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures (OMB No. 2502-0204) (HUD-50059) forms, we noted one form out of a sample of 40 that did not contain support for the income reported on the HUD-50059. The Company did not have internal controls in place to identify the lack of supporting documentation for the income included. Criteria: Management is responsible for establishing internal controls to ensure the accuracy of yearly completion and submission of the HUD-50059 of households occupying assisted units and making appropriate adjustments to the tenant and housing assistance payment (24 CFR section 891.410). Cause: During the year, the Company experienced turnover with personnel in the property manager roles responsible for the completion of the HUD-50059 and internal controls were not in place for proper review of the HUD-50059. Effect: There was no support for the income amount used. If the income amount used was incorrect, the Company’s rent charged could be improperly allocated between the tenant portion and the housing assistance portion. Questioned Costs: Unknown Recommendation: The Company should have internal controls in place to review form HUD-50059 to ensure all documentation used to calculate the tenant rent and housing assistance payment is supported and properly calculated. Views of responsible officials and planned corrective action: Management agrees with the finding. See separate corrective action plan.

Finding 2021-001 U.S. Department of Housing and Urban Development Section 8 Housing Assistance Payments Program ? ALN 14.195 Special Tests and Provisions Condition: We examined 29 tenant files for compliance with inspection requirements. We noted that for seven of the files tested, annual inspections were not performed within a one-year time frame as outlined with the Mercer County Housing Authority?s (MCHA) Section 8 Housing Assistance Payments plan. Criteria: Under compliance requirements set forth for the program, the Company is required to perform housing quality inspections at the time of initial occupancy for each housing unit and then at least annually thereafter to ensure units are in decent, safe, and sanitary condition. Cause: During the year, MCHA experienced staffing turnover, coupled with other logistical staffing challenges brought on by the COVID-19 pandemic. Effect: Mercer County Housing Associates LLC (Company) had eight housing units that did not receive housing quality inspections within the required annual timeframe from the previous inspection. Failure to perform timely housing quality inspections could result in unsafe living conditions for tenants of the Company. Questioned Costs: N/A Recommendation: We recommend that the Company implement additional procedures to ensure all housing units receive required inspections in a timely manner. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See separate corrective action plan.