Finding Text
Criteria
Tenant lease files are required to be maintained and tenant eligibility determined in accordance
with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing
Programs.
Condition
In connection with our lease file review, we noted the following deficiencies:
- 1 out of 1 lease files for new tenants did not follow EIV guidelines, no EIV report was generated
for move-in certification.
- 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV report was not
generated for recertification for one tenant and for the second tenant the report was generated
outside of the allowed 120-day period.
- 2 out of 6 lease files for existing tenants did not contain necessary documentation, both files
were missing gross rent change forms and latest executed versions of HUD-50059 form, one file
was also missing support for medical expenses presented on corrected HUD-50059 form.
- 1 out of 6 lease files for existing tenants did not contain necessary documentation to support
medical deductions.
- 1 out of 1 lease files for former tenants had security deposit refund that exceeded 30-day post
move-out window.
Cause
Management's policies with respect to the determination of eligibility and the maintenance of
tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of
Subsidized Multifamily Housing Programs were not consistently followed.
Effect or Potential Effect
The procedures for eligibility and maintaining tenant lease files were not consistently applied in
accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent
subsidies paid by HUD.
Recommendation
Management should establish procedures and monitor compliance with those procedures to
ensure that tenant eligibility is correctly determined and that tenant lease files are properly
maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy
Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code
R. Section 8 program administration
View of Responsible Officials
Management agrees with the finding. Managements Plan of Action for Non-Compliance of the
HUD Guidelines includes the immediate steps below:
Provide additional training and resources to ensure that the staff has a clear understanding of
HUD requirements that will include the importance of adhering to procedures and guidelines
with a specific focus on the EIV requirements and reporting, along with the timely processing
of annual recertifications.
Implement increased monitoring and oversight mechanisms to detect and correct compliance
issues.
Establish clear accountability measures for not following procedures through appropriate
corrective actions.
Effectively communicate the importance of following procedures to all staff, emphasizing the
impact on organizational efficiency and compliance.
Encourage a culture of continuous improvement where procedures are regularly reviewed,
communicated with the staff and provide regular training of changing circumstances or best
practices.
Finding Resolution Status: Resolved