Finding 1171375 (2025-001)

FINDING No. 2025-001: 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: Fifty-three tenants. Sample Size Information: Ten tenants. Identification of Repeat Finding and Finding Reference Number: No. Criteria: HUD regulations require form HUD-50059 certifications to be signed prior to the effective date and for all tenants to have a background check completed with the results retained in the file. Statement of Condition: Of the files selected, two tenant form HUD-50059 certifications were signed after the effective date and one tenant file did not contain a completed background check. Cause: The Project did not perform the recertification process in a timely manner for two tenants and did not complete and/or retain a background check for one tenant. Effect or Potential Effect: 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 that HUD required tenant eligibility procedures are adhered to, and that all documentation is retained in the tenant files. Response Indicator: Agree. Completion Date: 06/30/2026 Response: Staff training has been provided with additional HUD training inclusive of recertification deadlines and background check documentation. Tenant file maintenance is stressed and included in monthly reporting procedures.