Finding 1150452 (2024-001)

Finding No. 2024-001; Federal Assistance Listing Number 14.157 Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review we noted: • one out of four tenants did not have income verification with the use of the HUD Enterprise Income Verification ("EIV") performed timely. • an additional one out of four tenants did not have income verification with the use of EIV at all. • one out of three tenant files tested did not have a timely recertification performed. • one out of one new tenant lease files tested did not have a move-in inspection. • one out of one new tenant lease files tested did not have an initial certification performed timely. Cause Management's policies with respect to recertifications and 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. Context One out of four tenants tested in a population of 31 did not have income verification with the use of the HUD Enterprise Income Verification ("EIV") performed timely. One out of four tenants tested in a population of 31 did not have income verification with the use of the EIV performed at all. One out of three tenant files tested did not have a timely recertification performed, but the tenant was determined eligible. One out of one new tenant lease file tested did not have a move-in inspection. One out of one new tenant lease file tested did not have the initial certification performed timely. Repeat Finding Yes, 2023-001 Questioned Costs N/A Recommendation Management should establish procedures and monitor compliance with those procedures to insure that EIVs and recertifications are performed timely, inspections are completed, waitlists are being completed and followed, 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: Unresolved Views of Responsible Officials and Planned Corrective Actions REACH has policies in place to complete certifications in a timely manner but due to staffing shortages and tenant noncompliance issues the property continued to have issues with timely completion of income certifications in 2024. As new staff are brought onboard training is provided and annual HUD training is completed by all staff. Management will continue to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.