Finding Text
Supportive Housing for Persons with Disabilities (Section 811), ALN 14.181 Criteria: Under HUD regulations, recipients are required to maintain and make available all records necessary to demonstrate compliance with program requirements. HUD requires documentation of tenant eligibility, income verification, and rent determination. The Uniform Guidance requires recipients to maintain records that adequately identify the source and application of funds. Statement of Condition: We reviewed 10% of the total population of tenant files. During our review, we noted that documentation to support tenant eligibility determination was missing or incomplete. We consider this condition to be a significant deficiency. Cause: The deficiencies occurred due to inconsistent file management practices and ineffective internal review procedures to ensure that all required eligibility documentation is obtained and retained. Effect: Missing or incomplete files increase the risk of improper eligibility determinations, inaccurate rent calculations, questioned costs, and HUD noncompliance. Recommendation: We recommend that management strengthen internal controls over tenant file documentation by conducting periodic supervisory reviews of files to ensure that all required documentation is present and complete and by providing staff training on HUD eligibility and documentation requirements. Views of Responsible Officials: We agree with the auditor’s finding. The issue was primarily due to staff turnover of nearly 90% since August 2024, with new staff receiving little to no training on HUD requirements and The Arc’s Standard Operating Procedures, continued use of a failed software system through a five-year contract that ended May 31, 2025, and failed management practices prior to March 2025. Corrective procedures are now in place, and we believe these steps will resolve the matter going forward. Supervisors will initiate corrective actions to strengthen tenant file documentation and compliance with HUD requirements. Staff have received refresher training on eligibility and documentation--n procedures and will receive ongoing training and mentoring as needed. A thorough review of all properties has been conducted and supervisory reviews of tenant files will be conducted on a periodic basis going forward. Missing or incomplete documentation in existing files will be addressed where feasible. These measures are expected to resolve the deficiency and prevent recurrence in future audits.