Finding Text
Context - population, sample size, and instances of non-compliance
We selected a sample of seven tenant files from the 66 units at the property. We noted one
instance of non-compliance.
Condition
Management did not properly calculate adjusted gross income on the annual recertification
for one tenant based on information verified in the tenant's file. This is not a repeat finding.
Criteria
Per HUD Occupancy Handbook 4350.3 REV-1, CHG-4 Chapter 5, Determining Income and
Calculating Rent, each elderly or disabled family is permitted a medical expense deduction
for the unreimbursed medical expenses of all family members.
Effect
Adjusted gross income for the tenant was understated by $2,000 on the annual
recertification, resulting in excess rental assistance of $50 per month for the period affected.
There are questioned costs of $200 associated with this finding.
Cause
Management appropriately obtained third party verification of the tenant's unreimbursed
medical expenses. However, due to a clerical error by management in processing the HUD-
50059 certification, medical expenses and the medical expense deduction were overstated
on the tenant's annual recertification. The onsite manager's lapse in the consistent
application of HUD regulations related to determining income and calculating rent
contributed to this finding.
Recommendation
Management should process a corrected HUD-50059 certification and the PRAC should be
adjusted for the overpayment. Management should review previous certifications for similar
errors and process corrected certifications as necessary.
Reporting views of management
Management agrees with the finding. A corrected certification was processed on August 14,
2024 and the PRAC was adjusted by $200. Previous certifications will be reviewed and
corrected as necessary.
Auditor Non-Compliance Code
Project Rental Assistance