Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT (CONTINUED) Department of Housing and Urban Development Finding 2025-002: Major Program: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 STATEMENT OF CONDITION One tenant file, out of four files reviewed, had incorrectly accounted for tenant’s income, which resulted in undercharging the tenant $104 a month in rent. CRITERIA HUD Handbook 4350.3 Revision 1 for HUD Subsidized Multifamily Housing Programs requires owners to properly calculate tenants rent derived from the appropriate documents on file for tenants. EFFECT OF CONDITION The tenant was improperly undercharged $312 of rent for the year ended December 31, 2025. HUD was overcharged $312 of additional tenant assistance payments for the year ended December 31, 2025. CONTEXT During audit fieldwork, four tenant files from a statistically valid sample were examined for compliance with tenant eligibility criteria and HUD lease requirements. Of the four tenant files examined, income for one tenant was incorrectly accounted for, resulting in the wrong calculation of tenant rent and HUD tenant assistance payments. CAUSE OF CONDITION Management mistakenly did not ensure the proper income was used to calculate the tenant’s rent. RECOMMENDATION The auditor recommends ensuring all tenant’s paperwork is thoroughly reviewed and accurately used in the calculation of the tenant’s required monthly rent and HUD’s tenant assistance payments. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be billing the tenant for the $312 and reimbursing HUD for the additional tenant assistance payments of $312 due to the Project.