Finding Text
FINDING No. 2025-003: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Forty-one tenants. Sample Size Information: Five tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: In accordance with HUD, tenants in properties subsidized through the Section 8 program must pay a minimum total tenant payment (TTP) of $25. In any property in which the utility allowance is greater than $25, the full TTP is applied toward the utility allowance, and the amount the allowance exceeds $25 is reimbursed to the tenant as a utility reimbursement. Additionally, HUD regulations require timely collection and retention of all initial and ongoing tenant eligibility documentation. Completed lease addendums are required, and both initial and current tenants must be timely verified using the Enterprise Income Verification (EIV) report. Statement of Condition: The Project did not: •Remit a $44 per month utility reimbursement owed to one tenant. •Maintain all required lease addendums for one tenant. •Obtain the required EIV report for one tenant. Cause: The Project failed to remit the utility reimbursement to the applicable tenant and did not maintain appropriate tenant eligibility documentation as required by HUD. Effect or Potential Effect: One tenant is not receiving required financial assistance. Additionally, unable to verify tenant eligibility and cost of assistance may be disallowed. Auditor Non-Compliance Code: R – Section 8 Program Administration. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: Management should implement procedures to ensure proper adherence to Section 8 program administration by remitting the utility reimbursement to the tenant each month, and the Project should implement procedures to ensure that all initial and ongoing tenant eligibility documentation is obtained timely and maintained in tenant files as required by HUD. Response Indicator: Agree. Completion Date: 03/31/2026 Response: Management involved with remitting the utility reimbursements has been notified and will ensure timely implementation moving forward.