Finding Text
Inadequate Control Over Tenants File Documentation
Findings Resolution Status: In Process
Information on Universe Population Size: 50 Tenants
Sample Size Information: 5 Samples
Auditor Non-Compliance Code Drop-Down: Eligibility
Criteria: The U.S. Department of Housing and Urban Development (HUD) requires that tenant files
be properly maintained to ensure compliance with federal regulations. Specifically HUD Handbook 4350.3: Occupancy Requirements of Subsidized Multifamily
Housing Programs state that owners and managers must maintain complete and
accurate tenant files to verify eligibility, income, and compliance with program
requirements. This includes obtaining signed applications from applicants to
ensure all necessary information is provided for eligibility determination. HUD's Tenant File Organization and Retention Guidelines emphasize the
importance of proper record-keeping and require that all necessary certifications,
verifications, and supporting documents be available for review.
Furthermore, according to the Ohio Housing Finance Agency (OHFA) Program Compliance
Handbook, maintaining complete and well-organized tenant files is a key compliance requirement.
As outlined in Section 1.42-5 (Record-Keeping Provision), project owners are required to retain
records for each qualified low-income resident and building for every year of the compliance period.
These files must be available for review, including the original qualification documents used for the
Tax Credit program.
At a minimum, resident files should contain the following documents:
1. Lease – The initial lease, any addenda, and subsequent-year leases.
2. OHFA Sworn Income and Asset Statement (SIAS).
3. Supporting documentation for income and assets reported on the SIAS.
4. OHFA Tenant Income Certification (TIC).
5. Other relevant documentation as needed to verify household eligibility.
To ensure compliance, tenant files should be organized consistently and maintained in an accessible
manner to facilitate site reviews and audits.
Condition: During eligibility testing, the following issues concerning the tenant file’s documentation
were noted: Unit 1261- Missing Recertification and no tenant’s signature affixed in Security
Deposit Agreement Unit 1330- Missing Recertification and no tenant’s signature affixed in Security
Deposit Agreement, Ethnicity, HUD Form 9887 and Move-In document Unit 1062, 1174- Missing Recertification
Cause of Condition: The inadequacy in control over tenant file documentation is primarily due to
the lack of standardized procedures for managing these documents and insufficient training for staff
responsible for them. Additionally, there is an absence of a systematic approach for periodic reviews
and audits of the filing system.
Potential Effect of Condition: Without a standardized procedure in managing the tenants file and
review process, there is an increased risk of non-compliance with regulatory requirements, delays in
tenant eligibility verification, and inefficiencies in record retrieval. This could lead to audit findings,
regulatory reviews, or challenges in maintaining accurate tenant records.
Questioned Costs: $35,892
Reporting Views of Responsible Officials: The Organization agrees with the findings and
recommendations and will adhere to the corrective action plan.
Recommendation: To address the issues identified, we recommend the following actions:
1. Develop and Implement Standardized Filing Procedures - Establish clear, written guidelines
for the filing and management of tenant documents. Ensure these procedures are
comprehensive and include steps for document handling, storage, and retrieval.
2. Train Staff - Conduct training sessions for all relevant staff members on the new filing
procedures and the importance of maintaining accurate and up-to-date tenant records. Include
periodic refresher training to address any updates or changes in procedures.
3. Conduct Regular Reviews and Audits - Establish a routine schedule for reviewing and
auditing tenant files to ensure compliance with filing procedures and to identify any
discrepancies or issues early. Implement corrective actions promptly when issues are
identified.
Management Response: Management is currently conducting a comprehensive review of the process
to ensure alignment with compliance requirements and identify areas for improvement.