Finding Text
Finding reference number: 2024-004 Assistance Listing (Federal award identification number and year): Section 8 Project-Based Cluster, Assistance Listing No. 14.195, CA16L000004, and 1996 Auditor non-compliance code: R - Section 8 Program Administration Finding resolution status: Resolved Universe population size: 59 tenant files Sample size information: 15 tenant files Statistically valid sample: Yes Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: N/A Statement of condition 2024-004: During the year ended December 31, 2024, management did not maintain tenant files in accordance with HUD Handbook 4350.3 Chapter 7. Criteria: Pursuant to the HUD Handbook 4350.3 Chapter 7, management is required to complete recertifications for each tenant at least annually and appropriately adjusting HAP vouchers monthly. Effect: The Corporation is not in compliance with the HAP Contract. Cause: There was a change in management effective January 1, 2024. The former management company did not complete recertifications for all tenants by November 1, 2023 and the current management company was not made aware until March 2024. For 12 of the 15 tenant files included in our sample, HUD began to hold HAP in March 2024 as the annual certification was not completed, which was required to be completed by November 1, 2023. Recertifications dated November 1, 2022 were reprocessed and dated November 1, 2023 in order to continue receiving HAP. For 1 of the 15 tenant files, there was move out documentation in the file dated in 2023 however the unit was listed as occupied by the tenant throughout 2024. HAP was received for this tenant throughout 2024 and was corrected on the January 2025 HAP voucher. Recommendation: Management should perform a review of all tenant files and complete all recertifications that were not completed timely. Management should also ensure that all requirements of HUD Handbook 4530.3 Chapter 7 are adhered to in future periods. Management's response: Management concurs with the finding and recommendation. Management has completed the recertifications effective November 1, 2024 and 2025 or adjusted on the HAP voucher for any that were not completed timely.