Audit 303501

Criteria: The Corporation’s tenant files are required to be maintained in accordance with HUD guidelines to ensure eligibility and accurate calculations of tenant rent and rental subsidy. Statement of Condition: The tenant files are incomplete and lacking required documentation indicating verification of eligibility and resident rights. Form 50059 to calculate tenant rent and reported to HUD was not completed timely or accurately in accordance with HUD guidelines. Cause of Condition: The Corporation’s internal controls to ensure tenant files are complete and that the calculation of tenant rent is completed timely and accurately, and that the required documentation for tenant eligibility screening is maintained, were not effective. Effect of Condition: In the tenant file sampled, documentation was missing to include 1) HUD Housing Application; 2) acknowledgement of receipt of the Resident Rights and Responsibilities brochure, EIV & You brochure and Fact Sheet on How Your Rent is Determined; 3) EIV reports for income verification or social security validation; 4) current year unit inspection; and 5) initial notice sent at time of certification. Discrepancies were also noted in the completion of the Form 50059 to include 1) Social Security income and checking account balances were not updated from the prior year certification and 2) the Form 50059 was not signed or dated by the tenant/guardian or the management agent. The discrepancy resulted in the tenant underpaying their share of the monthly rent by $37 per month. Recommendation: The design of the current controls should be reviewed to ensure tenant files are accurate, complete, and orderly and include a checklist of required documentation. Procedures should also be established to ensure that the Form 50059 is completed timely and properly executed. The documentation in the files should support the data used in preparing the Form 50059 and calculating the tenant’s share of the rent. In addition, management should review all files and report any discrepancies to HUD in a timely manner. Views of Responsible Officials: Management agrees with the findings and will implement procedures to ensure tenant’s files are maintained in accordance with HUD guidelines.

Criteria: The Corporation’s tenant files are required to be maintained in accordance with HUD guidelines to ensure eligibility and accurate calculations of tenant rent and rental subsidy. Statement of Condition: The tenant files are incomplete and lacking required documentation indicating verification of eligibility and resident rights. Form 50059 to calculate tenant rent and reported to HUD was not completed timely or accurately in accordance with HUD guidelines. Cause of Condition: The Corporation’s internal controls to ensure tenant files are complete and that the calculation of tenant rent is completed timely and accurately, and that the required documentation for tenant eligibility screening is maintained, were not effective. Effect of Condition: In the tenant file sampled, documentation was missing to include 1) HUD Housing Application; 2) acknowledgement of receipt of the Resident Rights and Responsibilities brochure, EIV & You brochure and Fact Sheet on How Your Rent is Determined; 3) EIV reports for income verification or social security validation; 4) current year unit inspection; and 5) initial notice sent at time of certification. Discrepancies were also noted in the completion of the Form 50059 to include 1) Social Security income and checking account balances were not updated from the prior year certification and 2) the Form 50059 was not signed or dated by the tenant/guardian or the management agent. The discrepancy resulted in the tenant underpaying their share of the monthly rent by $37 per month. Recommendation: The design of the current controls should be reviewed to ensure tenant files are accurate, complete, and orderly and include a checklist of required documentation. Procedures should also be established to ensure that the Form 50059 is completed timely and properly executed. The documentation in the files should support the data used in preparing the Form 50059 and calculating the tenant’s share of the rent. In addition, management should review all files and report any discrepancies to HUD in a timely manner. Views of Responsible Officials: Management agrees with the findings and will implement procedures to ensure tenant’s files are maintained in accordance with HUD guidelines.