EIN: 930903773
UEI: FM4KKNEARTL4
Audited by: 930623286
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 14, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 14, 2025 (350 days ago).
What is a management decision? →Of the 12 properties tested, 5 were out of compliance as an inspection should have been completed by October 2023, and 1 was out of compliance as an inspection should have been completed by September 2023. Cause: The Organization is responsible for contacting the City of Salem (the City) and Oregon Housing and Community Services (OHCS) to schedule the inspections timely, but there were delays caused by the COVID-19 Pandemic. Effect: Units could be out of compliance with housing quality standards. Questioned Costs: None Recommendations: We recommend the Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Show full finding ▾Hide full finding ▴Criteria: During the period of affordability (i.e., the period for which the non-Federal entity must maintain subsidized housing) for HOME-assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than: (a) every 3 years for projects containing 1 to 4 units, (b) every 2 years for projects containing 5 to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR 92.209(i), 92.251(f), and 92.504(d)). Condition: Of the 12 properties tested, 5 were out of compliance as an inspection should have been completed by October 2023, and 1 was out of compliance as an inspection should have been completed by September 2023. Cause: The Organization is responsible for contacting the City of Salem (the City) and Oregon Housing and Community Services (OHCS) to schedule the inspections timely, but there were delays caused by the COVID-19 Pandemic. Effect: Units could be out of compliance with housing quality standards. Questioned Costs: None Recommendations: We recommend the Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
The Organization has created a tracking system that identifies when the last inspection was completed and when the next inspection should be due based on the number of units at each complex. NOTE: Inspections are not due until June through October of 2027 for complexes under the jurisdiction of the City of Salem.
2023-002
The Organization established the maximum subsidy and the minimum tenant contribution to rent for a tenant during the fiscal year, but the amount actually charged to the tenant was different than the amount calculated. Cause: The Organization utilized a third-party provider during the year, and new recertifications were completed by the provider. However, for the one home identified, the rent for a tenant did not agree to the minimum tenant contribution to rent. Effect: One tenant was charged less rent than they should have been. Questioned Costs: None Recommendations: The Organization should charge tenants rent based on the minimum tenant contribution to rent, which is calculated annually as a part of the recertification process. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Show full finding ▾Hide full finding ▴Criteria: 2 CFR Part 92.209(h) establishes the maximum subsidy that a participating Organization may pay to, or on behalf of a family. The Organization must also establish a “minimum tenant contribution to rent.” Condition: The Organization established the maximum subsidy and the minimum tenant contribution to rent for a tenant during the fiscal year, but the amount actually charged to the tenant was different than the amount calculated. Cause: The Organization utilized a third-party provider during the year, and new recertifications were completed by the provider. However, for the one home identified, the rent for a tenant did not agree to the minimum tenant contribution to rent. Effect: One tenant was charged less rent than they should have been. Questioned Costs: None Recommendations: The Organization should charge tenants rent based on the minimum tenant contribution to rent, which is calculated annually as a part of the recertification process. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
The Organization has scheduled regular meetings (twice per month) with the property management company to monitor the activities of the provider to ensure we are in compliance with Federal Statues. In addition, twice per year, we will perform an internal audit of each tenant file to ensure compliance.
2023-004
FAC accepted this audit on February 14, 2024 — management decision was due August 14, 2024.
Of the 14 tenant files tested, 5 tenants’ annual recertifications were not completed within one year of the last recertification. Cause: In fiscal year 2022, the Organization contracted with a third party to determine eligibility of tenants. During fiscal year 2023, it was determined the third party failed to complete annual recertifications timely. The Organization contracted with a new third party in fiscal year 2023, but they were unable to fully catch up on the recertifications. Effect: Annual recertifications were not performed timely which could allow ineligible tenants to remain on the program. Questioned Costs: None Recommendation: The Organization, or a third-party provider, should perform annual recertifications timely. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Show full finding ▾Hide full finding ▴2023-001 Assistance Listing No. 14.239 HOME Investment Partnerships Program (HUD) Eligibility Criteria: 2 CFR Part 92.252(h) stipulates each year during the period of affordability, the project owner must re-examine each tenant’s annual income. Condition: Of the 14 tenant files tested, 5 tenants’ annual recertifications were not completed within one year of the last recertification. Cause: In fiscal year 2022, the Organization contracted with a third party to determine eligibility of tenants. During fiscal year 2023, it was determined the third party failed to complete annual recertifications timely. The Organization contracted with a new third party in fiscal year 2023, but they were unable to fully catch up on the recertifications. Effect: Annual recertifications were not performed timely which could allow ineligible tenants to remain on the program. Questioned Costs: None Recommendation: The Organization, or a third-party provider, should perform annual recertifications timely. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Recommendation: The Organization, or a third-party provider, should perform annual recertifications timely. Action: Since February 1, 2023, the Organization has been engaged with a new property management company with expertise in the HOME program. As of this writing, over 90% of the 2023 recertifications are complete and appointments are being set for the City of Salem to do a complete file review.
2022-001
Of the 12 properties tested, 1 was out of compliance as an inspection should have been completed by May 2022 but was not completed until September 2023. Cause: The Organization is responsible for contacting the City of Salem (the City) and Oregon Housing and Community Services (OHCS) to schedule the inspections timely but there were delays caused by the COVID-19 Pandemic. Effect: Units could be out of compliance with housing quality standards. Questioned Costs: None Recommendations: We recommend the Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Show full finding ▾Hide full finding ▴2023-002 Assistance Listing No. 14.239 HOME Investment Partnerships Program Special Tests and Provisions - Housing Quality Standards Criteria: During the period off affordability (i.e., the period for which the non-Federal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than: (a) every 3 years for projects containing 1 to 4 units, (b) every 2 years for projects containing 5 to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR 92.209(i), 92.251(f), and 92.504(d)). Condition: Of the 12 properties tested, 1 was out of compliance as an inspection should have been completed by May 2022 but was not completed until September 2023. Cause: The Organization is responsible for contacting the City of Salem (the City) and Oregon Housing and Community Services (OHCS) to schedule the inspections timely but there were delays caused by the COVID-19 Pandemic. Effect: Units could be out of compliance with housing quality standards. Questioned Costs: None Recommendations: We recommend the Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Recommendation: The Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely. Action: The Organization has created a tracking system that identifies when the last inspection was completed and when the next inspection should be due based on the number of units at each complex. We are already scheduling inspections with the City for each complex under their jurisdiction. OHCS completed their inspection this past October.
2022-002
The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Show full finding ▾Hide full finding ▴2023-003 Assistance Listing No. 14.239 HOME Investment Partnerships Program Criteria: 2 CFR Part 200.303 establishes internal control requirements over federal awards that provides reasonable assurance the entity is managing the federal award in compliance with Federal Statutes. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Recommendation: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statues. Action: The Organization has scheduled regular meetings (twice per month) with the property management company to monitor the activities of the provider to ensure we are in compliance with Federal Statues. In addition, twice per year, we will perform an internal audit of each tenant file to ensure compliance.
2022-003
The Organization established the maximum subsidy and the minimum tenant contribution to rent for a tenant during the fiscal year, but the amount actually charged to the tenant was different than the amount calculated. Cause: The Organization changed third party providers during the year, and the rent amount for each tenant was transferred from one provider to another. The recertification completed by the prior provider during the fiscal year did not support the amount being charged. Subsequent to fiscal year, 2023, a new recertification was completed by the new provider and the monthly amount charged was updated to agree. Effect: One tenant was charged less rent than they should have been. Questioned Costs: None Recommendations: The Organization should charge tenants rent based on the minimum tenant contribution to rent which is calculated annually as a part of the recertification process. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Show full finding ▾Hide full finding ▴2023-004 Assistance Listing No. 14.239 HOME Investment Partnerships Program Criteria: 2 CFR Part 92.209(h) establishes the maximum subsidy that a participating Organization may pay to, or on behalf of a family. The Organization must also establish a “minimum tenant contribution to rent.” Condition: The Organization established the maximum subsidy and the minimum tenant contribution to rent for a tenant during the fiscal year, but the amount actually charged to the tenant was different than the amount calculated. Cause: The Organization changed third party providers during the year, and the rent amount for each tenant was transferred from one provider to another. The recertification completed by the prior provider during the fiscal year did not support the amount being charged. Subsequent to fiscal year, 2023, a new recertification was completed by the new provider and the monthly amount charged was updated to agree. Effect: One tenant was charged less rent than they should have been. Questioned Costs: None Recommendations: The Organization should charge tenants rent based on the minimum tenant contribution to rent which is calculated annually as a part of the recertification process. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in report.
Recommendation: The Organization should charge tenants rent based on the minimum tenant contribution to rent which is calculated annually as a part of the recertification process. Action: The Organization has scheduled regular meetings (twice per month) with the property management company to monitor the activities of the provider to ensure we are in compliance with Federal Statues. In addition, twice per year, we will perform an internal audit of each tenant file to ensure compliance.
FAC accepted this audit on May 15, 2023 — management decision was due November 15, 2023.
The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Of the 11 tenant files tested, 8 tenants? annual recertifications were not completed timely, 2 were not completed before issuance of the report and 1 was a new tenant which complied with requirements. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and the third-party failed to complete the annual recertifications timely. Effect: Annual recertifications were not performed timely which could allow ineligible tenants to remain on the program. Questioned Costs: None Recommendation: The Organization should perform annual recertifications timely.
Show full finding ▾Hide full finding ▴Criteria: 2 CFR Part 92.252(h) stipulates each year during the period of affordability, the project owner must re-examine each tenant?s annual income. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Of the 11 tenant files tested, 8 tenants? annual recertifications were not completed timely, 2 were not completed before issuance of the report and 1 was a new tenant which complied with requirements. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and the third-party failed to complete the annual recertifications timely. Effect: Annual recertifications were not performed timely which could allow ineligible tenants to remain on the program. Questioned Costs: None Recommendation: The Organization should perform annual recertifications timely.
Recommendation: The Organization should perform annual recertifications timely. Action: Effective February 1, 2023, the Organization has engaged with a different property management company with expertise in the HOME program. We are currently working a corrective action plan with 30-, 60- and 90-day deliverables.
Of the 12 properties tested, 6 were in compliance and 6 were out of compliance as of June 30, 2022. Cause: The Organization is responsible for contacting the City of Salem (the City) and Oregon Housing and Community Services (OHCS) to schedule the inspections timely but there were delays caused by the COVID-19 Pandemic. Effect: Units could be out of compliance with housing quality standards. Questioned Costs: None Recommendations: We recommend the Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely.
Show full finding ▾Hide full finding ▴Criteria: During the period off affordability (i.e., the period for which the non-Federal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than: (a) every 3 years for projects containing 1 to 4 units, (b) every 2 years for projects containing 5 to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR 92.209(i), 92.251(f), and 92.504(d)). Condition: Of the 12 properties tested, 6 were in compliance and 6 were out of compliance as of June 30, 2022. Cause: The Organization is responsible for contacting the City of Salem (the City) and Oregon Housing and Community Services (OHCS) to schedule the inspections timely but there were delays caused by the COVID-19 Pandemic. Effect: Units could be out of compliance with housing quality standards. Questioned Costs: None Recommendations: We recommend the Organization set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely.
Recommendation: The Organization should set up a schedule and tracking system in order to contact the City and OHCS in advance of the due date of inspections in order to allow the City and OHCS sufficient time to complete the inspections timely. Action: The Organization has created a tracking system that identifies when the last inspection was completed and when the next inspection should be due based on the number of units at each complex. We are confirming those dates with the City and OHCS and will be in frequent contact to schedule inspections when due.
2021-003
The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes.
Show full finding ▾Hide full finding ▴Criteria: 2 CFR Part 200.303 establishes internal control requirements over federal awards that provides reasonable assurance the entity is managing the federal award in compliance with Federal Statutes. Condition: The Organization contracted with a third party to determine eligibility of tenants. During the year, the third party failed to complete annual recertifications timely. Internal controls should be present to monitor the activities of the third party to ensure timely completion of recertifications. Cause: The Organization relied on a third-party provider to perform the work they were contracted to perform and did not implement internal controls to monitor the services provided to ensure they complied with Federal Statutes. Effect: Annual recertifications were not performed timely. Questioned Costs: None Recommendations: The Organization should implement internal controls to monitor the activities of third-party providers to ensure the services being provided are in compliance with Federal Statutes.
Recommendation: The Organization should implement internal controls to monitor the activities and third-party providers to ensure the services being provided are in compliance with Federal Statues. Action: The Organization has scheduled regular meetings (twice per month) with the property management company to monitor the activities of the provider to ensure we are in compliance with Federal Statues.
FAC accepted this audit on January 4, 2022 — management decision was due July 4, 2022.
One complex was vacant at June 30, 2021 and for most of the year as the Organization was looking to sell the property; therefore, it is not being used to house individuals meeting the eligibility requirements which was the original purpose of the loan. The Organization had obtained authorization from the City of Salem to sell the property, or to return the building back to the intended use, no waiver of non-compliance was issued. Criteria: Under the granting agreement, the Organization is to maintain the units for individuals with specified rates of income during the period of affordability (10 years) in order to have the loan forgiven. Questioned Costs: $331,596 Context: The Organization has received notification from the City of Salem that the loan is due back to the City as a result of the non-compliance. Effect: The Organization continues to have the debt recorded on their records and the complex would be released from all compliance requirements after repayment of the loan and fees assessed. Recommendation: The Organization has sold the property subsequent to year end and paid off the loan. As a result, the Organization is no longer bound by any compliance requirements held with the City of Salem on this property.
Show full finding ▾Hide full finding ▴Condition: One complex was vacant at June 30, 2021 and for most of the year as the Organization was looking to sell the property; therefore, it is not being used to house individuals meeting the eligibility requirements which was the original purpose of the loan. The Organization had obtained authorization from the City of Salem to sell the property, or to return the building back to the intended use, no waiver of non-compliance was issued. Criteria: Under the granting agreement, the Organization is to maintain the units for individuals with specified rates of income during the period of affordability (10 years) in order to have the loan forgiven. Questioned Costs: $331,596 Context: The Organization has received notification from the City of Salem that the loan is due back to the City as a result of the non-compliance. Effect: The Organization continues to have the debt recorded on their records and the complex would be released from all compliance requirements after repayment of the loan and fees assessed. Recommendation: The Organization has sold the property subsequent to year end and paid off the loan. As a result, the Organization is no longer bound by any compliance requirements held with the City of Salem on this property.
This property was sold after year end and prior to issuance of the financial statements, therefore there is no corrective action for this finding.
2020-004
Properties that maintain HOME units are required to have inspections completed in terms with their award agreements. Due to the COVID-19 pandemic, there were four properties that were due for inspection, which had not been obtained by year end. Criteria: The Organization is responsible for contacting the City of Salem and scheduling inspections on the appropriate timeline in accordance with the granting agreement. Questioned Costs: None Cause: The COVID-19 pandemic stalled the inspections being performed by the City. Effect: Units could be out of compliance with regulatory requirements as determined by the grant agreements. Context: There were four properties which required inspection. Recommendation: We recommend that the Organization set up a schedule and tracking system in order to contact the City of Salem in advance of when inspections are to be performed to remain in compliance with awards.
Show full finding ▾Hide full finding ▴Condition: Properties that maintain HOME units are required to have inspections completed in terms with their award agreements. Due to the COVID-19 pandemic, there were four properties that were due for inspection, which had not been obtained by year end. Criteria: The Organization is responsible for contacting the City of Salem and scheduling inspections on the appropriate timeline in accordance with the granting agreement. Questioned Costs: None Cause: The COVID-19 pandemic stalled the inspections being performed by the City. Effect: Units could be out of compliance with regulatory requirements as determined by the grant agreements. Context: There were four properties which required inspection. Recommendation: We recommend that the Organization set up a schedule and tracking system in order to contact the City of Salem in advance of when inspections are to be performed to remain in compliance with awards.
The City of Salem recently performed HOME inspections on Mill Creek Meadows (10/4), Woodmansee Place (10/5), Marilyn Townhomes (10/7), Winter Street Apartments (10/7), Highland Station (10/8), Chemawa Village (10/11), River Park (10/13), Statesman Village (10/15), White Oak (10/18) and Renaissance Place (10/22).
FAC accepted this audit on December 28, 2020 — management decision was due June 28, 2021.
Based on inquiry, there is no formal documentation regarding the policies, processes, and procedures to address how the Organization is to operate and maintain compliance with Uniform Guidance. This is considered a material weakness in controls over compliance. Criteria: The Organization should have written policies, procedures, and standards of conduct as required by 2 CFR 200 Subparts D and E. Questioned Costs: None Context: There has been turnover in the prior years, and a restructuring in the current year, which ultimately led to the discontinuation of the property department. The property department was previously the active body of the Organization responsible for oversight of the program administration. Effect: Lack of clear policies and procedures increases the risk for compliance findings due to errors or lack of monitoring. Recommendation: We recommend that the Organization implement the appropriate hierarchy structure in order to develop and implement an applicable set of internal policies, processes and procedures for operations under the Uniform Guidance.
Show full finding ▾Hide full finding ▴Condition: Based on inquiry, there is no formal documentation regarding the policies, processes, and procedures to address how the Organization is to operate and maintain compliance with Uniform Guidance. This is considered a material weakness in controls over compliance. Criteria: The Organization should have written policies, procedures, and standards of conduct as required by 2 CFR 200 Subparts D and E. Questioned Costs: None Context: There has been turnover in the prior years, and a restructuring in the current year, which ultimately led to the discontinuation of the property department. The property department was previously the active body of the Organization responsible for oversight of the program administration. Effect: Lack of clear policies and procedures increases the risk for compliance findings due to errors or lack of monitoring. Recommendation: We recommend that the Organization implement the appropriate hierarchy structure in order to develop and implement an applicable set of internal policies, processes and procedures for operations under the Uniform Guidance.
Action: Management will develop written policies, procedures and standards to specifically address how the Organization will operate and maintain compliance with Uniform Grants Guidance. In addition, it has been recommended by the CFO to perform an Appreciative Inquiry into the new shared responsibility structure of property management to strengthen individual roles and responsibilities. Depending on the conclusion of this report, a Gap analysis may be developed to improve how we manage our properties and comply with Uniform Grants Guidance.
2019-004
Open rental units were not filled timely. This is considered a significant deficiency in controls over compliance. Criteria: The Organization is responsible for filling open rental units as soon as possible with qualified tenants. Questioned Costs: None Cause: The vacant units are small 1-bedroom studio units. Most of the tenants for the Organization are families and these units are not the appropriate size for a family. In addition, 8 of the units are in one complex that the Organization intends to sell after year end, therefore they are not trying to fill the units. Effect: Available housing was not used to maximum impact in the community. Context: For 1 of the 12 properties tested there were 2 vacant units at June 30, 2020 that were still vacant at August 30, 2020. Recommendation: We recommend that the Organization solicit tenants for all their units to ensure the best use of the resources.
Show full finding ▾Hide full finding ▴Condition: Open rental units were not filled timely. This is considered a significant deficiency in controls over compliance. Criteria: The Organization is responsible for filling open rental units as soon as possible with qualified tenants. Questioned Costs: None Cause: The vacant units are small 1-bedroom studio units. Most of the tenants for the Organization are families and these units are not the appropriate size for a family. In addition, 8 of the units are in one complex that the Organization intends to sell after year end, therefore they are not trying to fill the units. Effect: Available housing was not used to maximum impact in the community. Context: For 1 of the 12 properties tested there were 2 vacant units at June 30, 2020 that were still vacant at August 30, 2020. Recommendation: We recommend that the Organization solicit tenants for all their units to ensure the best use of the resources.
Action: Property management has been contracted to a third-party, Shelter Management, Inc. (SMI). SMI has been instructed to seek out and offer all vacant units as they become ready to rent to appropriately qualified tenants. Management meets with SMI monthly to review vacancy reports and discuss and remove any potential barriers to fill vacant units.
2019-003
Two units tested for the appropriate documentation regarding the tenant's eligibility had the necessary documentation completed after the unit had been rented to the tenant. Criteria: HOME-assisted units in a rental housing project must be occupied by households that are eligible as low-income families and must meet certain limits on the rents that can be charged. Questioned Costs: None Context: Both tenants were in fact eligible for the units, but the appropriate controls to determine the HOME unit status were not apparent and the completion of the appropriate documentation was not completed prior to the tenant?s move in date. Effect: Lack of controls over which units are identified as HOME units could lead to filling units with unqualified tenants and lead to further non-compliance under the program. Recommendation: We recommend the Organization perform a review of all of their units to appropriately identify the HOME units and ensure that processes and controls are implemented to complete the necessary documentation on a timely basis.
Show full finding ▾Hide full finding ▴Condition: Two units tested for the appropriate documentation regarding the tenant's eligibility had the necessary documentation completed after the unit had been rented to the tenant. Criteria: HOME-assisted units in a rental housing project must be occupied by households that are eligible as low-income families and must meet certain limits on the rents that can be charged. Questioned Costs: None Context: Both tenants were in fact eligible for the units, but the appropriate controls to determine the HOME unit status were not apparent and the completion of the appropriate documentation was not completed prior to the tenant?s move in date. Effect: Lack of controls over which units are identified as HOME units could lead to filling units with unqualified tenants and lead to further non-compliance under the program. Recommendation: We recommend the Organization perform a review of all of their units to appropriately identify the HOME units and ensure that processes and controls are implemented to complete the necessary documentation on a timely basis.
Action: Management will review current rent rolls to verify that all HOME-assisted units are correctly identified and will review SMI processes and controls for tenant income verification and recommend improvements as needed.
One complex is currently vacant as the Organization is looking to sell the property; therefore it is not being used to house individuals meeting the eligibility requirements which was the original purpose of the loan. Subsequent to year end, the Organization has entered into a month to month lease agreement for use of the building. Criteria: Under the granting agreement, the Organization is to maintain the units for individuals with specified rates of income during the period of affordability (10 years) in order to have the loan forgiven. Questioned Costs: $331,596 Context: The Organization has received notification from the City of Salem that the loan is due back to the City as a result of the non-compliance. Effect: The Organization would no longer have the debt recorded on their records and the complex would be released from all compliance requirements after repayment of the loan and fees assessed. Recommendation: We recommend that the Organization work with the City to resolve the instance of non-compliance and repayment.
Show full finding ▾Hide full finding ▴Condition: One complex is currently vacant as the Organization is looking to sell the property; therefore it is not being used to house individuals meeting the eligibility requirements which was the original purpose of the loan. Subsequent to year end, the Organization has entered into a month to month lease agreement for use of the building. Criteria: Under the granting agreement, the Organization is to maintain the units for individuals with specified rates of income during the period of affordability (10 years) in order to have the loan forgiven. Questioned Costs: $331,596 Context: The Organization has received notification from the City of Salem that the loan is due back to the City as a result of the non-compliance. Effect: The Organization would no longer have the debt recorded on their records and the complex would be released from all compliance requirements after repayment of the loan and fees assessed. Recommendation: We recommend that the Organization work with the City to resolve the instance of non-compliance and repayment.
Action: Management will work with the City to obtain approval to sell the property to a buyer who is able to fulfill the HOME covenants, or will pay back the HOME investment with proceeds from the sale of the property.
FAC accepted this audit on February 20, 2020 — management decision was due August 20, 2020.
No evidence that required inspections were performed during audit period. This is considered to be a significant deficiency in controls over compliance and a compliance finding. Criteria: During the period of affordability (i.e., the period for which the non-Federal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than: (a) every 3 years for projects containing 1 to 4 units, (b) every 2 years for projects containing 5 to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Questioned Costs: Unknown Cause: The City of Salem is responsible for performing the inspections. Several of the buildings are being renovated and the City has informed the Organization that they are waiting until the renovations are complete to perform the inspections. Effect: Housing units could be out of compliance or have safety issues that have not been communicated to management. Context: For all 11 properties tested, all of them had inspections performed in 2018, however, there was no final report from the City evidencing the inspections were performed in compliance with the agreements. Recommendation: We recommend that the Organization contact the City of Salem and request inspections be performed in accordance with the compliance requirements. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in the report.
Show full finding ▾Hide full finding ▴Condition: No evidence that required inspections were performed during audit period. This is considered to be a significant deficiency in controls over compliance and a compliance finding. Criteria: During the period of affordability (i.e., the period for which the non-Federal entity must maintain subsidized housing) for HOME assisted rental housing, the participating jurisdiction must perform on-site inspections to determine compliance with property standards and verify the information submitted by the owners no less than: (a) every 3 years for projects containing 1 to 4 units, (b) every 2 years for projects containing 5 to 25 units, and (c) every year for projects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rental housing occupied by tenants receiving HOME-assisted tenant-based rental assistance to determine compliance with housing quality standards (24 CFR sections 92.209(i), 92.251(f), and 92.504(d)). Questioned Costs: Unknown Cause: The City of Salem is responsible for performing the inspections. Several of the buildings are being renovated and the City has informed the Organization that they are waiting until the renovations are complete to perform the inspections. Effect: Housing units could be out of compliance or have safety issues that have not been communicated to management. Context: For all 11 properties tested, all of them had inspections performed in 2018, however, there was no final report from the City evidencing the inspections were performed in compliance with the agreements. Recommendation: We recommend that the Organization contact the City of Salem and request inspections be performed in accordance with the compliance requirements. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in the report.
For all properties, an inspection was performed in 2018, however, there was no final report from the City of Salem evidencing the inspections were performed in compliance with the agreements. Management has requested final reports several times and discussed with the City the importance of continued monitoring in addition to final reports being issued as evidence the inspections were performed according to federal standards. Management will continue to follow up with the City of Salem on a regular basis.
2018-005
Open rental units were not filled timely. This is considered a significant deficiency in controls over compliance and compliance. Criteria: The Organization is responsible for filling open rental units as soon as possible with qualified tenants. Questioned Costs: None Cause: The vacant units are small 1-bedroom studio units. Most of the tenants for the Organization are families and these units are not the appropriate size for a family. In addition, 8 of the units are in one complex that the Organization intends to sell after year end, therefore they are not trying to fill the units. Effect: Available housing was not used to maximum impact in the community. Context: For 4 of the 10 properties tested there were 12 vacant units at June 30, 2019 that were still vacant at September 30, 2019. Recommendation: We recommend that the Organization solicit tenants for all their units to ensure the best use of the resources. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in the report.
Show full finding ▾Hide full finding ▴Condition: Open rental units were not filled timely. This is considered a significant deficiency in controls over compliance and compliance. Criteria: The Organization is responsible for filling open rental units as soon as possible with qualified tenants. Questioned Costs: None Cause: The vacant units are small 1-bedroom studio units. Most of the tenants for the Organization are families and these units are not the appropriate size for a family. In addition, 8 of the units are in one complex that the Organization intends to sell after year end, therefore they are not trying to fill the units. Effect: Available housing was not used to maximum impact in the community. Context: For 4 of the 10 properties tested there were 12 vacant units at June 30, 2019 that were still vacant at September 30, 2019. Recommendation: We recommend that the Organization solicit tenants for all their units to ensure the best use of the resources. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in the report.
For most of the units, property management has been contracted to a third-party, Shelter Management, Inc. (SMI). SMI has been instructed to seek out and offer all vacant units as they become ready to rent to appropriately qualified tenants. Management meets with SMI monthly to review vacancy reports and discuss and remove any potential barriers to fill vacant units.
2018-006
Based on inquiry, there is no formal documentation regarding the policies, processes, and procedures to address how the Organization is to operate and maintain compliance with Uniform Grant Guidance. This is considered a material weakness in controls over compliance. Criteria: The Organization should have written policies, procedures, and standards of conduct as required by 2 CFR 200 Subparts D and E. Questioned Costs: None Context: There has been turnover in the prior years, and a restructuring in the current year, which ultimately led to the discontinuation of the property department. The property department was previously the active body of the Organization responsible for oversight of the program administration. Effect: Lack of clear policies and procedures increases the risk for compliance findings due to errors or lack of monitoring. Recommendation: We recommend that the Organization implement the appropriate hierarchy structure in order to develop and implement an applicable set of internal policies, processes and procedures for operations under the Uniform Grant Guidance. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in the report.
Show full finding ▾Hide full finding ▴Condition: Based on inquiry, there is no formal documentation regarding the policies, processes, and procedures to address how the Organization is to operate and maintain compliance with Uniform Grant Guidance. This is considered a material weakness in controls over compliance. Criteria: The Organization should have written policies, procedures, and standards of conduct as required by 2 CFR 200 Subparts D and E. Questioned Costs: None Context: There has been turnover in the prior years, and a restructuring in the current year, which ultimately led to the discontinuation of the property department. The property department was previously the active body of the Organization responsible for oversight of the program administration. Effect: Lack of clear policies and procedures increases the risk for compliance findings due to errors or lack of monitoring. Recommendation: We recommend that the Organization implement the appropriate hierarchy structure in order to develop and implement an applicable set of internal policies, processes and procedures for operations under the Uniform Grant Guidance. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan included in the report.
Management will develop written policies, procedures, and standards to specifically address how the Organization will operate and maintain compliance with Uniform Grants Guidance. In addition, it has been recommended by the CFO to perform an Appreciative Inquiry into the new shared responsibility structure of property management to strengthen individual roles and responsibilities. Depending on the conclusion of this report, a Gap analysis may be developed to improve how we manage our properties and comply with Uniform Grants Guidance.
FAC accepted this audit on November 29, 2018 — management decision was due May 29, 2019.
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2017-003
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2017-009
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2017-011
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2017-006
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Show full finding ▾Hide full finding ▴FAC accepted this audit on January 24, 2018 — management decision was due July 24, 2018.
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2016-009
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2016-004
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2016-005
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2016-008
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FAC accepted this audit on January 4, 2017 — management decision was due July 4, 2017.
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2015-004
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2015-005
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