Support or reimburse the project $17,653 from nonproject funds for the project operating funds disbursed without sufficient supporting documentation.

Reclassify and properly record $45,000 in owner advances misclassified as loans.

Strengthen controls to ensure that project advances are reimbursed only when the project is in a surplus-cash position.

Implement adequate controls to ensure the review of the management agent fee to ensure that it is properly calculated in accordance with the HUD management agent certification and approved prior to payment from project operating funds.

Implement adequate controls to ensure that project funds are used only for eligible and supported operating expenses.

Obtain a formal agreement and approval from HUD to specify who is authorized to use the project’s community and recreation rooms and what activities are authorized or prohibited. In addition, this agreement must ensure that sufficient legal and liability protections are in place, establish consequences for noncompliance, and determine who is to pay for the utilities and maintenance of the rooms.

Amend the management agent agreement compensation schedule to remove bookkeeping fees as a fee separate from the 8.9 percent management agent fee.

Reimburse HUD $30,037 from nonproject funds for the overpayment of housing assistance and utility allowances due to incorrect calculations.

Reimburse the appropriate households $144 from nonproject funds for the underpayment of housing assistance due to incorrect calculations.

Support or reimburse HUD $159,938 from nonproject funds for the unsupported payments of housing assistance cited in the finding.

Pursue collection from the applicable household or reimburse HUD $26,915 from nonproject funds for the overpayment of housing assistance due to unreported income.

Implement adequate quality control procedures to ensure that housing assistance payments are appropriately calculated and supported. These procedures and controls should ensure that $54,257 in program funds is appropriately used for future payments.

Ensure that third-party verifications, such as tax returns provided by the applicant, are from the source by obtaining certified tax returns from the Internal Revenue Service.

Revise its occupancy standards to include policies and procedures to prevent underutilization of the project’s units.

Ensure that the management agent’s staff is properly trained and familiar with HUD’s and the project’s requirements regarding housing assistance payments calculations.

Conduct criminal record background checks in accordance with the project’s policies and procedures to ensure that adult members of all households, including the 11 households for which HUD made housing assistance payments totaling $239,500, were eligible to participate in the program. If the participants are deemed ineligible, the owner should follow applicable regulations to terminate or modify assistance and reimburse HUD from nonproject funds for those housing assistance payments deemed ineligible.

Review and update the project’s waiting lists to include the missing dates and required notations.

Develop and implement adequate procedures and controls to ensure that the project complies with HUD’s requirements and its own policies regarding the management of its waiting lists.

Determine whether the households residing in the project’s assisted units received housing in accordance with the program’s requirements and if not, consider a referral to HUD’s Office of Fair Housing and Equal Opportunity.

Provide documentation to support housing assistance payments the projects received totaling $497,762 or reimburse HUD from nonproject funds for any amount that it cannot support.