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 4 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely.
1 out of 4 tenants tested did not utilize the EIV system in relation to the completion of the annual tenant recertification Form 50059.
Cause
The Project 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.
Effect or Potential Effect
The procedures for determining tenant security deposits and eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. 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 4 tenant files from a population of 26 were selected. We identified exceptions in 2 out of the 4 files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding
This finding is a repeat finding, see prior year finding 2023-002. Recommendation
Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, 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
Finding Resolution Status: In-process
Views of Responsible Officials
As there has been a change in the Management Agent, the agent will ensure that the EIV Income Report and annual certifications are completed according to HUD guidelines. The site now has updated its file set-up review to make sure reports have been completed within HUD guidelines and new company policy as well as implementing corporate compliance monitoring.