Finding 1182789 (2025-001)

Finding No. 2025-001 - Eligibility - Material Weakness U.S. Department of Housing and Urban Development 14.157 Supportive Housing for the Elderly Section 202 Loan 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 During our testing, we noted that the income verification of tenant eligibility through Enterprise Income Verification (“EIV”) system was not performed timely. Cause Management's policies with respect to the determination of 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 - N/A Context A sample of 7 tenant files were selected from a population of 56. We identified exceptions in 2 out of the 7 files tested. Identification as a repeat finding Yes or no? 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. Management's Response Management agrees with the recommendation and has begun to implement the following: • A checklist form will be completed for every certification and signed off once file is approved. • An AR form will be created for the move in, transfer and move out process which is to be attached with proof of payment. Once completed it is to be sent to senior staff for review. • The file setup format and recertification updates will be monitored on a monthly basis. • EIVs are being run according to the frequency provisions related to the type of reports we are annually required to complete as per HUD. • Annual inspections are being scheduled as per Annual Recertifications are being processed. • Bi-weekly meetings will be in place to discuss the results collected with a tracking log on the progress of the project. • Trainings will be scheduled to keep on top of HUD updates/compliance procedures; Yardi software trainings; and in-house trainings covering compliance with the files and Yardi 50059 module.