Finding 1136802 (2024-003)

Finding No. 2024-003; Federal Assistance Listing Number 14.195, Section 8 Housing Assistance Payments Program 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 Compliance procedures were not followed regarding the timely use of Enterprise Income Verification (“EIV”) system during annual recertification or initial certification process. Cause Management's policies with respect to the determination of tenant 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 determining tenant 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. Questioned Costs None Context In connection with our lease files review we noted the following deficiencies: 2 out of 8 existing tenants tested, the Project completed Enterprise Income Verification ("EIV"), but it was not performed within 120 days prior to tenant's annual recertification, which constitutes noncompliance with HUD regulations regarding tenant eligibility and the maintenance of lease files. 1 out of 1 new tenant tested, the Project completed Enterprise Income Verification ("EIV"), but it was not performed within 90 days after the tenant's move-in date, which constitutes noncompliance with HUD regulations regarding tenant eligibility and the maintenance of lease files. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number 2023-003). Recommendation Management should monitor compliance with established 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 Finding Resolution Status: In process Views of Responsible Officials-Management has implemented compliance monitoring measures that ensures every file is fully audited for signatures, dates and proper calculations. The compliance manager utilizes a monthly checklist which now includes confirming signatures and dates are present.