Audit 411386

Federal Program: Home Investment Partnership Program (AL #14.239) Federal Award: Home Investment Partnership Program Federal Agency: U.S. Department of Housing and Urban Development Criteria: In accordance with HUD Handbook 4350.3 Rev-1, Chapter 7, Owners of Project Rental Assistance Contract properties must perform annual recertifications of income and family composition and adjust tenant rent accordingly. Compliance with HUD occupancy requirements is mandatory for continued subsidy payments. Condition: During the review of tenant files for the year ended December 31, 2025, 5 out of 6 sampled tenant files lacked timely annual recertifications. For these sampled files, the managing agent did not complete the annual Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures by the required anniversary date. Cause: Staff turnover contributed to the delay in completion of the annual recertifications. Effect: Failure to complete annual recertifications timely may result in incorrect tenant rent, improper subsidy payments and potential HUD enforcement actions, including repayment of overpaid assistance. Recommendation: Management should train staff regarding annual recertification rules and implement procedures to ensure timely completion of annual recertifications. Management’s Views and Corrective Action Plan: The Owner acknowledges the finding and recognizes the importance of maintaining compliance with HUD occupancy requirements. The Owner has taken corrective action by terminating the current management agent and engaging a new management company with demonstrated experience in HUDassisted housing compliance. The new management agent will assume responsibility for all occupancy and recertification activities and will implement procedures to ensure that annual and interim recertifications are completed accurately and within HUD required timeframes. The Owner will oversee the performance of the new management agent through regular compliance reviews and will take any additional corrective measures necessary to ensure continued adherence to HUD regulations and prevent recurrence of this finding.