Audit 399383

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 the 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, 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 the 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 the date of unit vacancy as the effective move-out date. The Organization was not aware that tenant had passed away until months after date of death. Effect of Condition: Over three months of subsidy were received on behalf of the tenant. Recommendation: The design of the current controls should be reviewed to ensure proper vacancy dates are utilized on the monthly vouchers when a move out is processed. The overpayment of subsidy received should be repaid to HUD. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure that all move out adjustments processed are utilizing the proper vacancy date. The overpayment of subsidy will be repaid to HUD through adjustments to monthly billing.

Criteria: The Organization is required to hold all tenant security deposits in a separate interest bearing account. Statement of Condition: The Organization withdrew funds from the security deposit account in the current year leaving the amount of cash in the security deposit account lower than the total liability for current tenants’ security deposits. Cause of condition: The Organization does not keep an active listing to track the payment of tenant deposits and allocated interest earned on account. Effect of condition: Security deposit bank account is underfunded. Recommendation: The design of the current controls should be reviewed to ensure all tenant security deposits are properly tracked. Management should make transfers to the security deposit account to cover all deposits currently on hand. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure proper tracking of security deposits and will make the necessary transfer to fund the security deposit account.