Audit 25848

Finding 2022-001: Annual income incorrectly reported per HUD 4350.3 REV-1, Change 4, Chapter 5: Paragraph 5-6I. & HUD 4350.3 REV-1, Change 4, Chapter 5: Exhibit 5-2 and 24 CFR 5.609(b) and (c). Section 8 Housing Assistance Payment Program 14.195 Eligibility Criteria: In the annual Management Review for Multifamily Housing Projects, HUD found that gross income was calculated incorrectly for one tenant, per HUD 4350.3 REV-1, Change 4, Chapter 5: Paragraph 5-6I. In addition, it was also noted that determining the annual income and calculation income from assets was done without verification for same tenant per HUD 4350.3 REV-1, Change 4, Chapter 5: Exhibit 5-2 and 24 CFR 5.609(b) and (c). Condition: HUD noted that the income information on the tenant move-in certification did not agree with the verified file information. HUD also noted that the annual per capita income received from indigenous tribe government was excluded without verification to confirm the exclusion criteria had been met. In addition, while conducting the tenant eligibility test work, income was found to be calculated incorrectly, additional income of $10,948.35 was not previously included. Income was recalculated and recertified in May, 2022. Cause: The owner/agent utilized net amount to calculate annual income prior to data entry. In addition, the tenant disclosed net quarterly bank deposits from Salt River Pima Indian Community per capita income; however, the owner/agent failed to verify the source, gross amount, and frequency prior to excluding the income. The tenant file includes the owner/agent clarification indicating "HUD does not recognize income paid from tribes." Effect: Annual income is not reported correctly. Eligibility for assistance and annual income cannot be determined until all necessary verifications are completed and properly documented. Subsidy may have been overpaid. Recommendation: HUD stated corrective action should include submission of the corrected move in certification (to include annual gross benefit amount along with all other household income) and related supporting documentation. The corrected certification should be submitted to TRACs. In addition, HUD requested that the required verification of per capita income to include source, gross amount, and frequency received along with all regulatory documentation to determine the income is specifically excluded. If the verification reflects the income must be included, a fully executed move-in and gross rent certification to return overpaid subsidy should be submitted to TRACs. Management response: Management recalculated the SSA benefit based on the gross income on the benefit award letter. Both the move in and GR HUD-50059?S have been corrected to reflect full per-capita benefit amounts and will be transmitted via TRACs with the next voucher. The new subsidy payment is reflected on income certification as of May, 2022. Management corrected the finding as of October 28th, 2022.

Finding 2022-001: Annual income incorrectly reported per HUD 4350.3 REV-1, Change 4, Chapter 5: Paragraph 5-6I. & HUD 4350.3 REV-1, Change 4, Chapter 5: Exhibit 5-2 and 24 CFR 5.609(b) and (c). Section 8 Housing Assistance Payment Program 14.195 Eligibility Criteria: In the annual Management Review for Multifamily Housing Projects, HUD found that gross income was calculated incorrectly for one tenant, per HUD 4350.3 REV-1, Change 4, Chapter 5: Paragraph 5-6I. In addition, it was also noted that determining the annual income and calculation income from assets was done without verification for same tenant per HUD 4350.3 REV-1, Change 4, Chapter 5: Exhibit 5-2 and 24 CFR 5.609(b) and (c). Condition: HUD noted that the income information on the tenant move-in certification did not agree with the verified file information. HUD also noted that the annual per capita income received from indigenous tribe government was excluded without verification to confirm the exclusion criteria had been met. In addition, while conducting the tenant eligibility test work, income was found to be calculated incorrectly, additional income of $10,948.35 was not previously included. Income was recalculated and recertified in May, 2022. Cause: The owner/agent utilized net amount to calculate annual income prior to data entry. In addition, the tenant disclosed net quarterly bank deposits from Salt River Pima Indian Community per capita income; however, the owner/agent failed to verify the source, gross amount, and frequency prior to excluding the income. The tenant file includes the owner/agent clarification indicating "HUD does not recognize income paid from tribes." Effect: Annual income is not reported correctly. Eligibility for assistance and annual income cannot be determined until all necessary verifications are completed and properly documented. Subsidy may have been overpaid. Recommendation: HUD stated corrective action should include submission of the corrected move in certification (to include annual gross benefit amount along with all other household income) and related supporting documentation. The corrected certification should be submitted to TRACs. In addition, HUD requested that the required verification of per capita income to include source, gross amount, and frequency received along with all regulatory documentation to determine the income is specifically excluded. If the verification reflects the income must be included, a fully executed move-in and gross rent certification to return overpaid subsidy should be submitted to TRACs. Management response: Management recalculated the SSA benefit based on the gross income on the benefit award letter. Both the move in and GR HUD-50059?S have been corrected to reflect full per-capita benefit amounts and will be transmitted via TRACs with the next voucher. The new subsidy payment is reflected on income certification as of May, 2022. Management corrected the finding as of October 28th, 2022.