Audit 399375

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 PRAC billings as a result of completed recertifications, resulting in a large overpayment of subsidy from HUD. Cause of Condition: The Organization processed adjustments to monthly PRAC billings for eight tenants requesting subsidy for previous months under a new rate without also processing adjustments to return the previously received subsidy to HUD. Effect of Condition: For eight tenants, the Organization received one to eight months of excess subsidy. Recommendation: The design of the current controls should be reviewed to ensure adjustments made to the monthly billings are accurate before submission. Excess subsidy payments should be repaid to HUD. View of Responsible Officials: The Organization understands the finding and will implement procedures to ensure that all adjustments made to the monthly billings are reviewed for accuracy before submission. Overpayment of excess subsidy will be repaid to HUD through adjustments to monthly billings.