Audit 370535

CONDITION: During our review of tenant files, we noted that one tenant did not meet the age eligibility requirement of being 62 years or older at the time of initial occupancy, as required by the Section 202 program guidelines. CRITERIA: Per HUD Handbook 4350.3, Chapter 3, applicants for Section 202 housing must be at least 62 years old at the time of initial occupancy. Owners must obtain and verify acceptable documentation of age eligibility before move-in. EFFECT: The Project is not in compliance with award requirements. Failure to properly document tenant eligibility could result in ineligible tenants receiving federally subsidized housing, which may lead to disallowed costs or repayment of federal funds. CONTEXT: A sample of tenant files was selected as part of the compliance portion of the audit. Upon review, it was discovered that one tenant did not meet the age requirements under the Section 202 program guidelines. While the Project has received an Age Waiver Request to admit persons 55 years and older beginning June 15, 2025, this waiver was not in place when the referenced tenant was admitted. Had the waiver been active, the tenant would have been eligible. CAUSE: The deficiency appears to be isolated and a result of on-site personnel not following established policies and procedures. The on-site property manager, who is no longer employed by the Project, processed the application and admitted the ineligible tenant. Senior management did not identify the property manager’s error at time of processing. RECOMMENDATION: We recommend management implement procedures to ensure that proper documentation of age eligibility (e.g., government-issued ID or birth certificate) is obtained and retained in the tenant file prior to move-in. In addition, all staff should be trained on HUD eligibility requirements to prevent future findings. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: Management agrees with the finding. As of September 26, 2025, the Project has implemented a revised tenant intake checklist at the main office that includes mandatory verification of age eligibility. All tenant files are being reviewed for compliance, and staff have been retrained on eligibility requirements.