Finding 1123938 (2023-002)

Finding 2023-002 - Eligibility - Significant Deficiency Name of Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: 14.239 - Home Investment Partnership Program Federal Award Identification Number and Year: N/A Name of Pass-through Entity: N/A 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: 4 out of 9 tenants tested did not have the annual tenant recertification form completed timely. 1 out of 9 tenants tested did not have the accurate amount of adjusted annual income reported on the tenant recertification form. Cause The Organization failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None Context A sample of nine tenant files from a population of 27 were selected. We identified exceptions in four out of the nine files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding This finding is not a repeat finding. 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. Views of Responsible Officials Management will begin the recertification process 120 days prior to the recertification effective date to ensure adequate time for preparation and review. Management will issue a Notice to Vacate to any household that has failed to provide required documentation 30 days prior to the recertification effective date. Furthermore, income calculations will be thoroughly reviewed to ensure all sources of income and assets are calculated accurately and without the possibility of income discrepancies. Both tasks will primarily be handled by the Property Manager and Assistant Property Manager with additional assistance and oversight from the Regional Director and Assistant Regional Directors.