Audit 306145

FINDING No. 2023-001: Section 8 Housing Assistance Payments Program, ALN 14.195 Finding Resolution Status: Unresolved. Information on Universe Population Size: One hundred and sixty-four tenants. Sample Size Information: Twenty tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2022-001. Criteria: HUD regulations require management to maintain the following items in the tenant files: • initial Enterprise Income Verification (EIV) performed within 90 days of the tenant being entered into Tenant Rental Assistance Certification System (TRACS) and annual EIV performed at least 30 days prior to recertification anniversary date; • all lease addenda, including VAWA, signed by the tenant and owner; • move-in and annual unit inspection reports; • initial and annual HUD-50059s signed by the tenant and owner on or before the effective date; • criminal background checks performed prior to the tenant moving in; • an apartment application signed by the applicant and signed and dated when received by the owner; and • HUD-9887 and HUD-9887-A signed by the tenant and owner. Statement of Condition: The following items were noted: • seven tenants were missing initial income verification through EIV system; • three tenants were missing annual income verification through EIV system; • two tenants’ income verification through EIV system was performed after 90 days of entering them into TRACS; • two tenants were missing a signed VAWA lease addendum; • nine tenants were missing annual inspection reports, • two tenants were missing move-in inspection reports; • two tenants’ initial HUD-50059s were not maintained; • one tenant’s annual HUD-50059 was not maintained; • two tenants were missing a complete criminal background check; • two tenants were missing an apartment application that is signed and dated when received; • one tenant did not sign the apartment application; • two tenants were missing a signed HUD-9887; • one tenant did not sign the HUD-9887; • ten tenants were missing various signed lease addenda; • two tenant files were missing the security deposit check/money order image. Cause: The manager did not perform and/or maintain appropriate tenant eligibility documentation in accordance with HUD requirements. Effect or Potential Effect: Unable to determine date and time for the receipt of applications for proper waiting list placement and subsequent selection to occupy a unit. In addition, improper maintenance of tenant files and not verifying tenant 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 will be adopted. Recommendation: The Project should implement procedures to ensure all documentation related to applicants and tenants is properly executed and maintained. In addition, the manager verify eligibility by obtaining all required documents for potential tenants, maintain support for tenant income verification through the EIV system in a timely manner, and perform appropriate unit inspections. Response Indicator: Agree. Completion Date: 9/30/2024 Response: A new Community Manager was hired and is now on site and going through training on all HUD and EHDOC policies and procedures. For EIV reporting we have an alert in the computer system to notify managers of when the 90-day reports are due. Compliance is also sending out monthly email reminders to run all EIV reports. Moving forward compliance will review new move in files and recertification files for completeness and accuracy.

FINDING No. 2023-001: Section 8 Housing Assistance Payments Program, ALN 14.195 Finding Resolution Status: Unresolved. Information on Universe Population Size: One hundred and sixty-four tenants. Sample Size Information: Twenty tenants. Identification of Repeat Finding and Finding Reference Number: Yes, 2022-001. Criteria: HUD regulations require management to maintain the following items in the tenant files: • initial Enterprise Income Verification (EIV) performed within 90 days of the tenant being entered into Tenant Rental Assistance Certification System (TRACS) and annual EIV performed at least 30 days prior to recertification anniversary date; • all lease addenda, including VAWA, signed by the tenant and owner; • move-in and annual unit inspection reports; • initial and annual HUD-50059s signed by the tenant and owner on or before the effective date; • criminal background checks performed prior to the tenant moving in; • an apartment application signed by the applicant and signed and dated when received by the owner; and • HUD-9887 and HUD-9887-A signed by the tenant and owner. Statement of Condition: The following items were noted: • seven tenants were missing initial income verification through EIV system; • three tenants were missing annual income verification through EIV system; • two tenants’ income verification through EIV system was performed after 90 days of entering them into TRACS; • two tenants were missing a signed VAWA lease addendum; • nine tenants were missing annual inspection reports, • two tenants were missing move-in inspection reports; • two tenants’ initial HUD-50059s were not maintained; • one tenant’s annual HUD-50059 was not maintained; • two tenants were missing a complete criminal background check; • two tenants were missing an apartment application that is signed and dated when received; • one tenant did not sign the apartment application; • two tenants were missing a signed HUD-9887; • one tenant did not sign the HUD-9887; • ten tenants were missing various signed lease addenda; • two tenant files were missing the security deposit check/money order image. Cause: The manager did not perform and/or maintain appropriate tenant eligibility documentation in accordance with HUD requirements. Effect or Potential Effect: Unable to determine date and time for the receipt of applications for proper waiting list placement and subsequent selection to occupy a unit. In addition, improper maintenance of tenant files and not verifying tenant 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 will be adopted. Recommendation: The Project should implement procedures to ensure all documentation related to applicants and tenants is properly executed and maintained. In addition, the manager verify eligibility by obtaining all required documents for potential tenants, maintain support for tenant income verification through the EIV system in a timely manner, and perform appropriate unit inspections. Response Indicator: Agree. Completion Date: 9/30/2024 Response: A new Community Manager was hired and is now on site and going through training on all HUD and EHDOC policies and procedures. For EIV reporting we have an alert in the computer system to notify managers of when the 90-day reports are due. Compliance is also sending out monthly email reminders to run all EIV reports. Moving forward compliance will review new move in files and recertification files for completeness and accuracy.