Juneau Project Didn’t Comply with HUD Rules and Regulations

HUD audited Gruening Park Apartments, a 96-unit apartment complex in Juneau, Alaska, that’s owned and operated by the Alaska Housing Development Corporation, to determine whether the owner administered the project and its programs in compliance with its regulatory agreement and other HUD requirements. HUD chose this project because its cash position—at negative $294,058—was significantly deficient.

The auditors found that the owner generally administered the project and its programs in compliance with the regulatory agreement and other HUD requirements. But it didn’t comply with HUD rules and regulations regarding its waiting list, security deposit collections, rent calculations, mortgage insurance premium payments, or management fee calculations.

The owner made changes to the project’s waiting list aimed at addressing the auditors’ concerns and reimbursed the project for its overpaid management fees.

The auditors recommended that HUD require the owner to implement policies and procedures to improve its waiting list documentation, security deposit collections, recertification review process, and automatic withdrawals. They also recommended that the owner reimburse tenants for all overpayments, reconcile the mortgage insurance premium overpayment with the lender, and accurately calculate its management fee.

• HUD Audit Report 2012-SE-1006: Gruening Park Apartments, Juneau, AK (9/5/12)