FAC Explorer

Finding 1181798 (2023-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2026-03-20
Audit: 393088
Organization: 145 SO. 3RD STREET HOUSING DEVELOPMENT FUND CORPORATION (NY)
Auditor: COHNREZNICK LLP

AI Summary

  • Core Issue: Tenant lease files are not being maintained properly, leading to potential eligibility errors.
  • Impacted Requirements: Compliance with HUD Handbook 4350.3 is inconsistent, affecting tenant eligibility determinations.
  • Recommended Follow-Up: Management should create and enforce procedures to ensure timely recertification and EIV checks, along with enhanced staff training.

Finding Text

Finding No. 2023-002; Supportive Housing for the Elderly - Section 202, Listing 14.157 Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition In connection with our lease file review, we noted the following deficiencies: For one out of six tenants tested the annual recertification was not performed in a timely manner. For five out of six tenants tested, the EIV system was not run in a timely manner. Cause Management's policies with respect to the determination of tenant eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining tenant eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs None. Identification as a Repeat Finding No Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code: Internal control deficiencies Finding Resolution Status: In process. Views of Responsible Officials Management will implement a plan to strengthen recertification and EIV compliance. Management will enhance staff training and accountability and provide ongoing monitoring of compliance measures.

Corrective Action Plan

A. Strengthening Recertification Compliance 1. Implementation of a Recertification Tracking System: a. A digital tracking log will be used to monitor upcoming recertifications with alerts at 90, 60, and 30 days before due dates. b. The Senior Housing Specialist will oversee timely completion and issue weekly progress reports to the Director of Asset Management. c. Non-compliant files will be flagged for immediate follow-up with tenants. d. PMCS, a third-party group, will assist with recertifications. 2. Enforcing Timely Recertifications: a. Recertifications must be completed no later than 30 days before expiration. b. Staff will receive monthly reminders, and escalation measures will be implemented for delays. 3. Quarterly Internal Audits: a. PMCS and internal staff will conduct random file audits every three months to ensure adherence. b. Deficiencies will be addressed in real-time, and corrective steps will be logged. B. Ensuring EIV System Compliance 1. Standardizing EIV Compliance Procedures: a. A formal checklist will be created for EIV report reviews, ensuring all required reports are generated before lease renewals. b. EIV data will be cross-referenced with tenant files every quarter to ensure completeness. 2. Internal Monthly EIV Reviews: a. The Senior Housing Specialist will generate and review EIV reports on the 1st of each month. b. The Director of Asset Management, Third-Party Compliance Officer (PMCS), and Senior Housing Specialist will verify compliance before reports are finalized. 3. Quarterly Compliance Reports: a. The Compliance Officer will submit a quarterly compliance report documenting completion rates and deficiencies. C. Enhancing Staff Training and Accountability 1. Mandatory Quarterly Training: a. Staff will undergo quarterly compliance training covering HUD Handbook 4350.3, recertifications, and EIV compliance. b. Training sessions will be documented, and staff performance assessed. 2. Clarification of Responsibilities: a. Staff roles will be clearly outlined in a Standard Operating Procedure (SOP) document. b. Staff will be required to acknowledge their roles in compliance processes. 3. PMCS Involvement for Training Support: a. PMCS will offer supplementary training sessions as needed. D. Documentation and Oversight Enhancements 1. Maintaining Complete and Auditable Files: a. All lease and EIV documentation will be stored both physically and digitally. b. A real-time compliance dashboard will track completion rates. 2. Routine Management Reviews: a. The Senior Housing Specialist and Director of Asset Management will conduct monthly spot checks to verify document accuracy and completion. b. Non-compliance will result in formal corrective actions.

Categories

Eligibility HUD Housing Programs Subrecipient Monitoring

Other Findings in this Audit

  • 1181797 2023-001
    Material Weakness Repeat
  • 1181799 2023-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $11.07M