Finding Text
Program U.S. Department of Housing and Urban Development (HUD) – Supportive Housing for Persons with Disabilities (Section 811) and Project Rental Assistance, Assistance Listing No. 14.181. This finding was partially reported as finding 2023-001 in the prior year. Condition/Context A haphazard sample of three tenant files out of twenty-four (not a statistically valid sample) were selected for testing and the required documentation to determine eligibility, as required by the HUD regulations, could not be located as follows: For one of the files, Form HUD-50059, Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures was not provided. For one of the files, there was no verification of income by a third party provided. For all of the files, there was no signed move-in/move-out inspection form provided. Additionally, our testing indicated that the required deposits to the replacement reserve account had not been made for the last quarter of the Corporation’s fiscal year for any tenants. Criteria Tenant files and all required documents should be completed and maintained as required by HUD requirements and replacement reserve deposits need to be made timely. Cause There were no procedures in place to ensure that all tenant files were properly completed and maintained or ensure that replacement reserve deposits were made. Effect Inadequate tenant file documentation and lack of timely replacement reserve deposits has resulted in the Corporation’s inability to comply with the HUD Regulatory Agreement. Recommendation We recommend the Corporation establish procedures and internal controls to ensure that all required documentation is maintained, and all required reserve deposits are made timely, in accordance with HUD requirements. Finding 2024-002 Program U.S. Department of Housing and Urban Development (HUD) – Supportive Housing for Persons with Disabilities (Section 811) and Project Rental Assistance, Assistance Listing No. 14.181. This finding was partially reported as finding 2023-001 in the prior year. Condition/Context A haphazard sample of three tenant files out of twenty-four (not a statistically valid sample) were selected for testing and the required documentation to determine eligibility, as required by the HUD regulations, could not be located as follows: For one of the files, Form HUD-50059, Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures was not provided. For one of the files, there was no verification of income by a third party provided. For all of the files, there was no signed move-in/move-out inspection form provided. Additionally, our testing indicated that the required deposits to the replacement reserve account had not been made for the last quarter of the Corporation’s fiscal year for any tenants. Criteria Tenant files and all required documents should be completed and maintained as required by HUD requirements and replacement reserve deposits need to be made timely. Cause There were no procedures in place to ensure that all tenant files were properly completed and maintained or ensure that replacement reserve deposits were made. Effect Inadequate tenant file documentation and lack of timely replacement reserve deposits has resulted in the Corporation’s inability to comply with the HUD Regulatory Agreement.