Audit 399380

Criteria: The Organization is required to perform an annual recertification of all tenants by the tenant’s recertification anniversary date. The Organization is required to inform tenants, through written notice, of their responsibility to provide information needed to complete recertification process and copies of these notices should be maintained in the tenant files, along with required supporting documentation. Tenant must be provided 30-day notice of an increase in tenant portion of rent upon completion of recertification procedures. Statement of Condition: The Organization did not maintain copies of notices of recertification or all supporting documentation, such as the EIV reports, in the tenant files and did not complete the recertification process in a timely manner. In one instance, a tenant was not provided 30-day notice of rent increase. Cause of condition: The Organization did not pursue tenant compliance after initial recertification notices were mailed to the tenants. Effect of condition: Annual recertifications are not completed on time. Recommendation: The design of the current controls should be reviewed to ensure tenants receive proper notice of annual recertification process and that the process is completed by the tenants certification anniversary date. Additionally, tenant files should be reviewed to ensure all supporting documentation is included. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure tenant recertifications are completed in a timely manner and supporting documentation is maintained in tenant files in accordance with HUD guidelines.

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 the 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 the effective move-out date. The Organization was not aware that tenant had passed away until over two months after date of death. Effect of condition: Over two 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 billings.

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, resulting in a large overpayment of subsidy from HUD. Cause of condition: The Organization processed an adjustment to monthly PRAC billings for one tenant 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 one tenant, the Organization received excess subsidy for five months. Recommendation: The design of the current controls should be reviewed to ensure that all adjustments to monthly billings are reviewed before submission. 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 billings are reviewed to ensure they are processed correctly. Overpayment of the subsidy will be repaid to HUD through adjustments to monthly billings.