Finding 1217212 (2025-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2026-06-09
Audit: 403348
Organization: South Seven Senior Village (WA)

AI Summary

  • Core Issue: Incomplete documentation for tenant eligibility, specifically missing background verification for 3 out of 10 files reviewed.
  • Impacted Requirements: The program mandates maintaining adequate documentation to support tenant eligibility determinations.
  • Recommended Follow-Up: Implement a standardized tenant file checklist and centralized document retention process; review existing files to obtain or reconstruct missing documentation.

Finding Text

2025-002 – Incomplete Documentation for Tenant Eligibility ALN#14.157 - Significant Deficiency Criteria for Specific Requirements: The program requires the auditee to maintain adequate documentation supporting tenant eligibility determinations, including required application/eligibility support, lease documentation, background verification records, and other required tenant file documentation. Condition: During our testing of tenant eligibility for ALN #14.157, we selected 10 tenant files for review. We noted that background verification support was not provided for 3 out of the 10 samples tested. As a result, the auditee was unable to provide complete documentation to support compliance with the eligibility requirements for those tenants. Questioned Cost: There were no questioned costs associated with the condition identified. Cause: Management indicated that the supporting documentation could not be located due to changes in staff and file retention/maintenance practices. Effect: Without complete background verification documentation, the auditee cannot fully demonstrate that all tenants tested met applicable eligibility requirements. This increases the risk of noncompliance with program eligibility requirements. Auditor's Recommendation: We recommend that management implement a standardized tenant file checklist and centralized document retention process to ensure all required eligibility documentation, including background verification support, is obtained, reviewed, and retained. Management should also review existing tenant files and obtain or reconstruct missing documentation where possible.

Corrective Action Plan

Management Response: Management concurs with the findings. OlyCAP recognizes the importance of maintaining complete and accurate tenant eligibility documentation to demonstrate compliance with HUD program requirements. The missing background verification documentation identified during the audit appears to be the result of incomplete lease up processes at project inception in 2005. While management believes eligibility determinations were appropriately made, supporting documentation was not obtained in the early period of the project. Corrective Action Plan: 1. OlyCAP has implemented a standardized tenant file checklist identifying all required eligibility and compliance documentation, including background verification records, income documentation, lease agreements, and other required tenant file components. 2. Housing program staff has been trained on file documentation requirements, records retention standards, and file review procedures. 3. Management conducted a comprehensive review in 2024 of all current tenant files to identify missing documentation. 4. Supervisory file reviews are conducted on all tenant files at lease up using the standardized checklist to verify that required documentation is complete and maintained in accordance with program requirements. These corrective actions are intended to strengthen internal controls over tenant eligibility documentation and ensure ongoing compliance with HUD requirements. Anticipated Completion Date: July 1, 2026 Responsible officials: .Executive Director .Housing Director .Housing Program Managers .Compliance and Quality Assurance Staff

Categories

Eligibility Significant Deficiency

Other Findings in this Audit

  • 1217209 2025-001
    Material Weakness Repeat
  • 1217210 2025-001
    Material Weakness Repeat
  • 1217211 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $748,754
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $77,455