Audit 399373

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 make adjustments to monthly billings as a result of recertifications. Statement of Condition: The Organization did not properly adjust monthly billings as a result of recertification. Cause of condition: The Organization processed an adjustment to monthly billing as a correction of the rent for one month instead of a change in rental rate as a result of the annual recertification. Effect of condition: The Organization received the incorrect subsidy for one of its tenants for 12 months. Recommendation: The design of the current controls should be reviewed to ensure that all adjustments to monthly billings are reviewed before processing. The Organization should repay the overpayment of subsidy to HUD. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure that all adjustments to monthly billing are reviewed to ensure they are processed correctly. Overpayment of the subsidy will be repaid to HUD through adjustments to monthly billing.

Criteria: The Organization is required to use Form 50059-A to process a move out in the event of a deceased tenant, retroactive to the earlier of 14 days after the tenant’s death or the date the unit was vacated. Any overpayment of subsidy that was paid on behalf of the deceased tenant must be repaid to HUD. Statement of Condition: The Organization did not use the appropriate date when processing Form 50059-A for a deceased tenant. The resulting overpayment of subsidy was not repaid to HUD. Cause of condition: The Organization used date of unit vacancy as effective move-out date. The unit was not vacant for several months due to tenant’s son moving into the unit and refusing to vacate. Effect of condition: Six months of subsidy were received on behalf of the deceased tenant. Recommendation: The design of the current controls should be reviewed to ensure proper vacancy dates are utilized in the event of a deceased tenant. The overpayment of subsidy received on behalf of the deceased tenant should be repaid to HUD. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure that move-outs as a result of a deceased tenant are processed in accordance with HUD guidelines. The overpayment of subsidy will be repaid to HUD through adjustments to monthly billing.