EIN: 942537633
UEI: GSA_MIGRATION
Finding 2021-001 Finding Resolution Status: In progress Information on Universe Population Size: Bookkeeping fees and other charges made by property management company. Sample Size Information: No sampling approach was used. Identification of Repeat Finding: No Statement of Condition: Bookkeeping fees were charged to the Organization even though the property management agreement did not include such fees. Some Board Members have also questioned other costs incurred and paid to the property management company. Criteria: Management agreement requires Board approval of invoices over $1,000. There was no indication of such approval for the bookkeeping fees. Effect: Bookkeeping fees and other costs incurred could be considered not allowable. It should be noted that bookkeeping fee is a commonly charged cost. For the many of the other charges incurred by the property management company, the Organization has indicated the services were performed. However prior approval was not received nor could they agree that the cost charged was reasonable. Cause: Management company believed charge were allowed. Questioned Costs: $24,054 was charged for bookkeeping fees. Recommendation: The property management company and board need to agree which fees are chargeable and which transactions require board approval before incurring the cost. View of Responsible Officials and Planned Corrective Actions: The current Board is in process of providing a resolution to approve bookkeeping expenses. Auditor?s Summary of the Auditee?s Comments on the Finding and Recommendations: Comments provided appear appropriate.
Current board of directors evaluating the costs incurred by Caritas and is expected to approve the accounting fees via a resolution.
Finding 2021-002 Finding Resolution Status: In progress Information on Universe Population Size: Year-end closing.Sample Size Information: No sampling approach was used. Identification of Repeat Finding: No Statement of Condition: During our audit, we identified that certain expenses were not accrued for as of year-end, including $219,842 of accrued interest and approximately $200,000 of invoices. Criteria: Organization has agreed to maintain books under GAAP. Effect: Expenses totaling $419,460 were not initially recorded. Cause: Due to the change in property management companies effective November 1, 2021. Questioned Costs: $419,460 of costs. Recommendation: Review of disbursements after year end should be evaluate for consideration of accrual. View of Responsible Officials and Planned Corrective Actions: There was oversight to due to the change in property management companies effective November 1, 2021. The mortgage payment was made on time. We accept the recommendations from the auditor that in the future, we will make sure all transactions are recording properly. Auditor?s Summary of the Auditee?s Comments on the Finding and Recommendations: Comments provided appear appropriate.
Board will work with the property management company to make sure year end accruals are considered.
Finding 2021-003 Finding Resolution Status: In progress Information on Universe Population Size: 211 units Sample Size Information: Review of 22 tenant files. Identification of Repeat Finding: No Statement of Condition: Documentation of annual physical inspections of two units were not retained in the tenant files. Criteria: HUD requires an annual inspection of tenant units. Effect: No support of any inspection was documented. Finding 2021-004, continued Cause: Management could not identify the cause. Questioned Costs: No questioned costs. Recommendation: Management should verify all units have an annual inspection. If such an inspection could not be completed, the reason(s) for the inability to have an inspection should be documented. View of Responsible Officials and Planned Corrective Actions: Annual unit inspections were conducted in July 2021 for all units. All unit inspections reports are filed in the tenant files. There are likely a few units where unit inspections were not conducted due to reports of covid and quarantine resulting in lack of inspections. Auditor?s Summary of the Auditee?s Comments on the Finding and Recommendations: Comments provided appear appropriate.
Unit inspections will occur during the year ended October 31, 2022.
Finding 2021-004 Finding Resolution Status: In progress Information on Universe Population Size: 211 units Sample Size Information: Review of 22 tenant files. Identification of Repeat Finding: No Statement of Condition: Within one tenant file noted no tenant documentation of zero income certification. Criteria: HUD requires support for the determination of annual income to be retained in tenant files. Effect: Tenant?s share of income based on calculation that has no support. Cause: Management could not identify the cause. Questioned Costs: No questioned costs. Recommendation: Documentation which supports tenant income should be retained in the tenant file. View of Responsible Officials and Planned Corrective Actions: Typically, zero income certifications forms are signed and completed and filed within the tenant files along with the tenant AR and EIV report. All of the zero income recertification forms should be in the tenant files. If not, current management can make corrections by adding the zero income certification forms and obtain resident signatures. Auditor?s Summary of the Auditee?s Comments on the Finding and Recommendations: Comments provided appear appropriate.
Board will work with current property management to obtain appropriate documentation.
GSA_MIGRATION
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