Finding 1077987 (2023-002)

Condition: Three tenant files from a sample of five tenant files tested were missing one or more documents required by HUD regulations including: • Tenant was unwilling to sign executed HUD Form 50059 for annual recertification in one instance • Insufficient documentation provided for income verification purposes in one instance • Discrepancy noted between tenant security deposit amount on lease agreement and listing in one instance • Absence of required birth certificate documentation in one instance • Lack of pre-rental inspection record in one instance • Missing pre-rental application documentation in one instance Criteria: Properly maintained tenant files are supposed to include all required items. Cause: Prior management had an oversight in internal controls to ensure that all required documents are maintained in tenant files. Housing Opportunities Corporation (“HOC”) took over management in April 2023. Effect or Potential Effect: The Corporation is not in compliance with its Project Rental Assistance Contract and Tenant Selection Plan. Recommendation: Management should design and implement internal controls to ensure all required documentation is collected and maintained for all tenants and will conduct an inspection of all tenant files to ensure completeness. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the auditor’s finding and recommendation. A new management agent was hired in April 2023 to oversee the implementation of a comprehensive internal control system, ensuring all tenant files include required documentation.