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:
- 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV reports were generated
outside of the allowed 120-day period.
- 2 out of 6 lease files for existing tenants did not contain necessary documentation, files were
missing gross rent change forms and latest executed versions of HUD-50059 form.
- 2 out of 6 lease files for existing tenants were not certified before required recertification date, one
file was 60 days late, second file was 116 days late.
- 1 out of 2 lease files for former tenants had late security deposit refund.
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.
Recommendations
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:
Z. Other.
View of Responsible Officials
Management agrees with the finding. Management’s plan of action for non-compliance of the HUD
Guidelines includes the immediate steps below:
1. 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.
2. Implement increased monitoring and oversight mechanisms to detect and correct
compliance issues.
3. Establish clear accountability measures for not following procedures through appropriate
corrective actions.
4. Effectively communicate the importance of following procedures to all staff, emphasizing
the impact on organizational efficiency and compliance.
5. 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 Resolutions Status:
Resolved