Senior Citizens Housing Development Corporation of Los AngelesNon-Profit

FINDING No. 2025-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Sixty-five tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires all initial and ongoing tenant eligibility documentation to be obtained timely and maintained during tenancy. Statement of Condition: Missing documentation in tenant files: One tenant’s application; Two tenants’ initial EIV reports; Two tenants’ background checks. Cause: The Project did not obtain and/or maintain appropriate tenant eligibility documentation as required by HUD. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that initial eligibility is verified and supporting documentation is obtained timely and properly maintained. Response Indicator: Agree. Completion Date: 06/30/2026 Response: Staff training has been provided with additional HUD training inclusive of EIV reporting and tenant file maintenance and included in monthly report procedures.

FINDING No. 2023-001: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Three move-out tenants. Sample Size Information: Three move-out tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2022-002. Criteria: HUD regulations require the owner must refund the full security deposit plus accrued interest and/or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair along with a statement of the tenant’s rights under state and local laws within 21 days after the move-out date. Statement of Condition: One tenant was not refunded their security deposits within 21 days after their move-out date. Cause: The manager did not adhere to state laws and HUD regulations for refunding security deposits resulting in the untimely refund of the security deposit. Effect or Potential Effect: The Project is not in compliance with HUD regulations and state laws regarding the refunding of security deposits with the required timeframe. Auditor Non-Compliance Code: M – Security Deposits Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations have been adopted. Recommendation: The Project should implement procedures to ensure the manager complies with state laws and HUD regulations for timely refunding of security deposits. Response Indicator: Agree. Completion Date: 11/3/2022 Response: Manager will be retrained on the regulations and procedures for refunding of security deposits within the specified time frame. Periodic follow ups will be done to ensure process is being followed.

FINDING No. 2023-002: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Seventy-four tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require proper maintenance of tenant files containing an apartment application that is signed and dated, and use of the Enterprise Income Verification (EIV) within 90 days of the tenant being entered into the Tenant Rental Assistance Certification System (TRACS). Statement of Condition: One tenant’s application was not signed or dated, and the initial EIV report was missing. Cause: The old Project manager did not maintain appropriate tenant eligibility documentation in accordance with HUD requirements. Effect or Potential Effect: Unable to determine date and time for the receipt of the application for proper waiting list placement and subsequent selection to occupy a unit. In addition, not verifying tenant income eligibility in accordance with HUD requirements can result in the cost of assistance and residency being disallowed. Auditor Non-Compliance Code: R – Section 8 Program Administration Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations have been adopted.Recommendation: The Project should ensure all required tenant documentation is complete and accurate and verify tenant income through the EIV system in a timely manner. Response Indicator: Agree. Completion Date: 9/1/2022 Response: Reminders will be sent by compliance each month to all managers for their EIV reports to be run for that month. Also alerts have been set up in One Site to assist with reminders. Applications will be checked periodically for signatures and dates to ensure they are on the form.

FINDING No. 2022-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Sixty-seven tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2021-001. Criteria: HUD regulations require that the owner/manager must indicate on the application the date and time received; provide the form HUD-92006 (Supplemental Information to Application for Assistance) to applicants to complete, sign and date; upon receipt of an application for tenancy or assistance; sign the lease and lease addendums; perform background/credit checks prior to tenant moving into a unit; and perform income verification through the Enterprise Income Verification (EIV) certification during the recertification process. Statement of Condition: Three applications for tenancy did not have any indication of the date and time received, ten applications did not have the Form HUD-92006 attached, three tenant files did not have certain lease addendums signed by the manager, two tenant files did not have the lease signed by the manager, two tenant files did not have a background check performed prior to move-in, and one tenant file did not have an EIV verification performed during the recertification process. Cause: The manager inadvertently excluded the date and time received on applications, the manager did not provide or maintain the Form HUD-92006 for applications, did not sign and date the lease and lease addendums maintained in the tenant files, did not perform the background check prior to tenants moving in, and entered the incorrect social security number when performing EIV income verification. Effect or Potential Effect: Unable to determine date and time for the receipt of applications for proper wait listing placement and subsequent selection to occupy a unit, not maintaining files in accordance with HUD requirements, and verifying tenant eligibility and cost of assistance and residency may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Administration Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure all applicant and tenant documentation is properly completed and maintained, the manager verifies eligibility by obtaining all required documents for potential tenants and maintains and verifies tenant income through the EIV system in a timely manner. Response Indicator: Agree. Completion Date: 06/30/2023 Response: Individual and group manager training will be conducted in following the proper procedures when taking applications and maintaining the waiting list. A previous manager who is no longer an employee completed many of the files pulled for review. Going forward Compliance will also review random move-in files to determine that proper procedures are being followed.

FINDING No. 2022-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Four move-out tenants. Sample Size Information: Four move-out tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require the owner must refund the full security deposit plus accrued interest and/or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repaid along with a statement of the tenant?s rights under state and local laws within 21 days after the move-out date. Statement of Condition: One tenant was not refunded their security deposits within 21 days after their move-out date. Cause: The manager did not adhere to state laws and HUD regulations for refunding security deposits resulting in the untimely refund of the security deposit. Effect or Potential Effect: The Project is not in compliance with HUD regulations and state laws regarding the refunding of security deposits with the required timeframe. Auditor Non-Compliance Code: M ? Security Deposits Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should implement procedures to ensure the manager complies with state laws and HUD regulations for timely refunding of security deposits. Response Indicator: Agree. Completion Date: 07/19/2022 Response: All managers have been provided training on proper procedures inclusive of security deposit refund state laws.

FINDING No. 2021-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: 69 tenants. Sample Size Information: 10 tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2020-002. Criteria: HUD regulation requires all tenants to have background checks performed prior to acceptance as residents, complete and sign an apartment application, timely verification of tenant?s initial income through the use of Enterprise Verification (EIV) reports with the corresponding documentation maintained, HUD-50059 to be signed on or before the effective date of the form, unit inspection reports signed by the tenant, and all income reported on the HUD-50059 for accuracy of the tenant?s rent calculation. Statement of Condition: The Project did not perform and/or maintain the tenant background check prior to acceptance as a resident for two tenants, the signed apartment application for one tenant, the HUD-50059 signed by the tenant on or before the effective date of the form for one tenant, the unit inspection report form signed by the tenant for one tenant, and the initial EIV for two tenants. Also, the Project did not accurately report the income on the HUD-50059 for one tenant. Cause: The Project did not adhere to HUD regulations for initial eligibility and leasing activities and did not perform timely income verification. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance and residency may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Administration Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should implement procedures to ensure the Project verifies eligibility by obtaining all required documents for potential tenants, verifies initial tenant income through the EIV system in a timely manner and maintain all required tenant documentation. Response Indicator: Agree. Completion Date: 06/30/2022 Response: Management has implemented a new policy where all new managers attend required new manager trainings as well as the annual manager?s conference where they receive additional HUD training.

Finding No. 2021-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: 69 tenants. Sample Size Information: 10 tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulation requires annual unit inspections performed in a timely manner with the corresponding documentation maintained. Statement of Condition: The Project did not perform annual unit inspections for two tenants due to safety precautions taken in regard to the coronavirus. Cause: The Project did not conduct the annual unit inspections due to the coronavirus pandemic. Effect or Potential Effect: Unable to determine and assess whether the property has sustained any damage that require repairs. Auditor Non-Compliance Code: R ? Section 8 Program Administration Reporting Views of Responsible Officials: Management respectfully disagrees with the finding. Recommendation: The Project should perform annual unit inspections and maintain all required tenant documentation. Response Indicator: Disagrees. Completion Date: 06/30/2022 Response: For the health and safety of our seniors and staff, management has instructed the sites not to perform unit inspections during Covid pandemic.

FINDINGS ? FINANCIAL STATEMENT AUDIT FINDING No. 2020-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Interest on notes payable account. Sample Size Information: Interest on notes payable account. Identification of Repeat Finding and Finding Reference Number: No. Criteria: Management must ensure all Project activity is properly recorded on the Project?s financial records. Statement of Condition: Management did not record annual interest on the note payable in the amount of $50,523. Cause: Month-end closing procedures did not identify the omission of this entry. Effect or Potential Effect: Management understated expenses and liabilities on the Project?s financial records. Auditor Non-Compliance Code: S ? Internal control deficiencies. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: Management should verify that all month-end procedures are followed to ensure all Project activity is recorded on the Project?s financial records. Response Indicator: Agree. Completion Date: 06/30/2020 Response: Management has provided accounting staff with additional training as well as an updated procedure list.

FINDINGS AND QUESTIONED COSTS ? MAJOR FEDERAL AWARD PROGRAMS AUDIT FINDING No. 2020-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Eighty-seven tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require all income to be reported on Form HUD-50059 for accuracy of the tenant?s rent calculation. Additionally, all tenants must have a signed Form HUD-9887 retained in the tenant files. Statement of Condition: HUD regulations require all income to be reported on Form HUD-50059 for accuracy of the tenant?s rent calculation. Additionally, all tenants must have a signed Form HUD-9887 retained in the tenant files. Cause: The Project made a calculation error when annualizing the tenant?s income. Additionally, the Project did not retain a signed Form HUD-9887 for one tenant. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should implement procedures to ensure reportable income is accurately presented on the Form HUD-50059 to appropriately determine the tenant?s portion of monthly rent and that all required documents are maintained in the tenant files. Response Indicator: Agree. Completion Date: 03/24/2020 Response: Management has provided project with additional training on HUD regulations and implemented new procedures where the regional directors conduct periodic file reviews.

FINDING No. 2019-001: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Eight tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, the owner must refund the full security deposit plus accrued interest and/or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant?s rights under state and local laws within 21 days from move-out. Statement of Condition: The Project did not refund the security deposit plus accrued interest to one tenant within the state required 21 days from tenant move out. Cause: The Project did not follow the state law and HUD regulations for refunding security deposits resulting in an untimely refund of the security deposit to one tenant. Effect or Potential Effect: The Project refunded the tenant?s security deposit after the 21-day state requirement. Auditor Non-Compliance Code: M ? Security Deposits Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should comply with state law and HUD regulations for refunding security deposits and ensure all refunds are made to the move-out tenants within the required period. Response Indicator: Agree. Completion Date: 04/03/2019 Response: Manager has received additional training on both state and HUD regulations.

FINDING No. 2019-002: Section 202 Supportive Housing for the Elderly, CFDA 14.157 Finding Resolution Status: Unresolved. Information on Universe Population Size: Seventy-three tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: 2018-001 Criteria: HUD regulation requires timely verification of tenant?s current and initial income through the use of Enterprise Income Verification (EIV) reports. Background checks must be completed prior to acceptance as new tenants. The Form HUD-50059 certification/recertification must be signed by the tenant on or before the effective date of the lease. Additionally, the project must ensure applicants are given priority in accordance with their application and classification order. Statement of Condition: Of the tenant files selected, three tenant files did not contain verification of initial income and three tenant files did not contain verification of annual income through the use of EIV reports. However, initial income was verified via other supporting documentation. The project did not complete four background checks prior to tenants move-in. The project did not obtain the tenant signature on the HUD-50059 on or before the recertification effective date for two of the selected tenant files. The project did not maintain documentation to verify appropriate applicants? selection from the waitlist. Cause: The Project did not obtain timely and complete documentation, and maintain the documents as required by HUD. Effect or Potential Effect: Unable to verify tenant eligibility and cost of assistance may be disallowed. Auditor Non-Compliance Code: R ? Section 8 Program Admin Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor?s recommendations have been adopted. Recommendation: The Project should implement procedures to ensure EIVs are performed on all tenants and maintained in the tenant?s file. Background checks must be completed prior to tenant?s move-in. All HUD-50059 certifications/recertifications must be signed and dated in accordance with HUD regulations. Proper documentation must be made and maintained for all applicants on the waitlist, and applicant selection must be made in accordance with priority classification order. Response Indicator: Agree. Completion Date: 06/30/2020 Response: The former community manager did not adhere to HUD regulations of initial eligibility. All of the current staff have received additional training on HUD guidelines inclusive of initial eligibility requirements.

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