Finding Text
Criteria: Per 24 CFR 5.801 and HUD Handbook 4350.3, all tenant certifications must be supported by a completed HUD Form 50059, this documentation is required to verify tenant eligibility, rent calculations, and subsidy amounts and must retained in tenant files for review and audit purposes. Condition: During our testing of lease eligibility, we noted that HUD form 50059 was not available for two of the tenant files selected for testing. The client was unable to provide the executed forms during our audit. Considered a finding. Cause: During the fiscal year 2024, the majority of the property was sold during the fiscal year 2024, and certain tenant records may not have been retained or transferred appropriately during the transition period. As a result, the required documentation could not be located. Effect: The absence of HUD Form 50059 limits our ability to verify tenant eligibility and the accuracy of housing assistance payments. This may result in unallowable costs being charged to the program and noncompliance with HUD record retention requirements. Questioned Costs: None noted. Recommendation: We recommend that management implement controls and procedure to ensure that all required tenant documentation, including HUD Form 50059, is retained in accordance with HUD and program record retention requirements, especially during and after property transitions. In addition, management should evaluate current recordkeeping practices and establish controls to prevent similar occurrences in the future.