Finding Text
Statement of Criteria: The Project is required to obtain HUD Approval for tenant rent increase. Statement of Condition: During the year, it was noted that the Project received HUD Approval for a rent increase; however, the increase was not implemented. As a result, tenant rents charged did not reflect the new HUD-approved rate. Statement of Cause: Management did not have adequate controls in place to ensure that HUD-approved rent increases were consistently and timely updated within the tenant billing system. Additionally, there as a lack of review procedures to verify that revised review schedules were accurately applied. Statement of Effect: The Project is not in compliance with HUD rent-setting requirements, which may result in undercollection of revenue. Recommendation: Management should implement procedures to ensure HUD-approved rent increases are recorded in a timely manner, accurately applied, and supported by proper documentation. Management Response: See corrective action plan for managements' response.