Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAMS AUDIT (CONTINUED) Department of Housing and Urban Development Finding 2025-002: Major Program: Supportive Housing for the Elderly (Section 202 Capital Advance - Accumulated Balance), Federal Assistance Listing Number 14.157 STATEMENT OF CONDITION Two tenant files, out of six files reviewed, had incorrectly accounted for tenant’s income, which resulted in overcharging one tenant $45 a month in rent and undercharging one tenant $9 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 One tenant was improperly overcharged $540 of rent and HUD was undercharged $540 of additional rental assistance payments for the year ended December 31, 2025. One tenant was improperly undercharged $99 of rent and HUD was overcharged $99 of additional rental assistance payments for the year ended December 31, 2025. CONTEXT During audit fieldwork, six tenant files from a statistically valid sample, were examined for compliance with tenant eligibility criteria. Of the six files examined, income for two tenants 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 tenants’ 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 billed HUD for the $540 of tenant assistance and will be reimbursing the tenant for the additional rent of $540. The Project will be billing the tenant for the $99 and reimbursing HUD for the additional tenant assistance of $99.