Audit 399372

Criteria: The Organization is required to perform an annual recertification of all tenants, which requires verifying tenant income and documenting eligibility with HUD Form 50059. Tenants are required to sign the form, and it must be maintained within the Organization’s tenant file, along with supporting documentation. Statement of Condition: The Organization did not maintain signed annual recertification forms for the tenant files tested during the audit and did not maintain all of the information such as the EIV reports in the files to support the data used in its preparation. Cause of condition: The Organization did not pursue tenant compliance after letters for recertification were mailed to the tenants. Effect of condition: There is no evidence of a tenant’s eligibility for rent assistance maintained by the Organization in the tenant file. Recommendation: The design of the current controls should be reviewed to ensure tenant files are complete and accurate. The Organization should fill out and maintain HUD Form 50059 for each annual recertification and keep information in the files that support the data used in its preparation. Tenants should sign the recertification form. 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 finding and will implement procedures to ensure tenant recertifications are documented in accordance with HUD guidelines and that proper documentation is maintained within the tenant files.

Criteria: The Organization is required to remit to HUD all excess residual receipts (defined as the balance in the residual receipts account in excess of $250 per unit) annually upon the expiration and/or renewal of the PRAC until such time as HUD suspends the recapture requirement. Statement of Condition: The Organization did not remit all of its excess residual receipts to HUD. Cause of condition: While the Organization established a liability account for its excess residual receipts in a prior year and remitted most of the amount to HUD during the current year, the Organization did not remit the full amount of its excess residual receipts to HUD. Effect of condition: Excess residual receipts were not remitted to HUD as required. Recommendation: The Organization should contact HUD to facilitate the remittance of excess residual receipts. Views of Responsible Officials: Management agrees with the finding and will contact HUD to ensure that all excess residual receipts are remitted to HUD as soon as possible.