Finding Text
Finding No. 2023-005: Verification of Tenant Assets (Significant Deficiency)
Statement of condition
Eligibility
During the year ended June 30, 2023, management did not perform a verification of tenant assets as part of tenant certification and recertification procedures.
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, HUD projects are required to verify tenant assets to ensure appropriate subsidy calculations.
Cause
The Organization's tenants are multi-handicapped blind low-income adults. The cash accounts held by the tenants are maintained by the Sponsor on behalf of the tenants and therefore other assets are not verified.
Effect
Subsidy receipts could be overstated.
Recommendation
Management should review and enhance its certification and annual recertification procedures to include a verification of tenant assets.
Identification of repeat finding
The finding is a repeat of Finding No. 2022-006.
Auditor non-compliance code
S - Internal control deficiencies
Questioned costs
None
Finding resolution status
In process