Finding 2024 – 101 – Annual Recertification of Income Not Performed, Documentation of Eligibility (Material Weakness, Material Noncompliance) Federal program information: Funding agency: U.S. Department of Housing and Urban Development Title: Supportive Housing for people with disabilities Assistance Listing Number: 14.181 Award year: 2023/2024 Award numbers: Project 123-HD042; AZ20Q081002 Pass-Through grantors: N/A Compliance Requirement: Eligibility Questioned Costs: Unknown Contact Name: Joe Keeper, Chief Financial Officer of the Sponsor Corrective Action Planned: 1. Complete all missed annual recertifications immediately. • Method: The property manager shall immediately Identify every tenant file where an annual income recertification was not performed. Collect and verify all required documentation from the affected tenants, using third-party verification as the preferred method. • Responsible Party: Property Manager. 2. Document all eligibility factors and discrepancies. • Method: For every affected tenant file, thoroughly document the process of verifying income, assets, and eligibility. Include explanations for any missing third-party verifications and document all follow-up attempts. • Responsible Party: Property Manager. 3. Retransmit corrected HUD Form 50059 filings to the TRACS system. • Method: Submit corrections for each tenant with a file deficiency by using the "Correction/Retransmittal" (R) code on a new Form HUD-50059A. • Responsible Party: Property Manager. 4. Address any rent-related issues arising from the missing recertifications. • Method: Calculate any potential back-rent owed by tenants due to misreporting or changes in income. Based on HUD guidelines and property policy, negotiate repayment plans if necessary, but carefully follow guidance regarding tenant culpability. • Responsible Party: Property Manager. 5. Revise and formalize resident file management policies and procedures. • Method: Update internal policy and procedural documents to establish clear, step-by-step instructions for completing annual recertifications, including all documentation requirements. Incorporate a standardized checklist for each tenant file to ensure consistent application. • Responsible Party: Controller and Property Manager. 6. Implement an improved tickler and tracking system. • Method: Use property management software to automatically generate alerts and reports for upcoming recertification deadlines. Implement a double-check process where a supervisor reviews and signs off on the list of upcoming deadlines each month to ensure no file is missed. • Responsible Party: Property Manager. 7. Provide comprehensive training for all staff involved in recertifications. • Method: Conduct mandatory training for all staff on Section 811 program requirements, focusing specifically on annual income recertifications and acceptable documentation. Include regular refresher training and create a central, accessible library of HUD guidance. • Responsible Party: Third Party Training Professionals, HUD and Property Manager’s compliance officer. 8. Establish a quality control review process. • Method: Implement a desk review process where a senior staff member or third-party consultant periodically audits a sample of completed recertification files. This internal monitoring should check for accuracy, completeness, and proper documentation. • Responsible Party: Property Manager. 9. Develop a monthly compliance monitoring report. • Method: The report will summarize the status of all recertifications for the month, listing upcoming deadlines and noting any files that required a correction. This will be presented to senior management. • Responsible Party: Property Manager. 10. Conduct a follow-up review. • Method: Engage an external auditor or consultant to perform a follow-up review of recertification files after the first year of the new procedures. This independent assessment will verify that the corrective actions are working effectively. • Responsible Party: Senior Management. 11. Provide status reports to HUD. • Method: As per the notice of noncompliance, submit regular reports to the relevant HUD Hub or Program Center detailing the progress on the CAP and any specific items requested. • Responsible Party: Property Manager and Chief Financial Officer of Sponsor. Anticipated Completion Date: December 2025