Finding 1224128 (2025-001)

Finding No. 2025-001 for U.S. Department of Housing and Urban Development: Assistance Listing 14.195 Project Based Rental Assistance (PBRA) Compliance Requirement Eligibility Criteria Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Statement of Condition During the procedures applied to a statistically valid sample of 25 tenant lease files, we noted 1 instance of noncompliance with HUD regulations regarding the maintenance of lease files. Of the 25 tenant files examined, 1 tenant file was unable to be obtained. All other 24 tenant files were properly documented and maintained. The finding represents an isolated problem within the organization’s maintenance of lease files. Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Cause The project failed to follow the policies and procedures which have been established for proper tenant file maintenance in accordance with HUD guidelines. This is not a repeat finding from the previous year. Questioned Cost None Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. Auditor Noncompliance Code R – Section 8 program administration View of Responsible Officials Management agrees with the finding. Management will establish procedures and monitor compliance with those procedures to ensure that the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD.