Finding 1229981 (2026-001)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2026
Accepted
2026-09-16

AI Summary

  • Core Issue: Management is improperly claiming subsidy for a unit where the resident has been absent for an extended period without proper documentation.
  • Impacted Requirements: Failure to comply with HUD Handbook 4350.3 regarding accurate certification of household information and documentation for temporary absences.
  • Recommended Follow-Up: Obtain necessary documentation to support the resident's status and assess the appropriateness of continued subsidy claims.

Finding Text

HUD Handbook 4350.3 requires owners to administer occupancy in accordance with HUD requirements and to accurately certify household information used to determine assistance. When a resident is absent from the unit for an extended period, the owner must determine whether the absence is temporary or whether the resident has permanently vacated the unit. Assistance payments must be supported by documentation demonstrating that continued occupancy and subsidy are appropriate. HUD generally limits temporary absenses for medical reasons 180 days. Resident moved to nursing facility on April 11, 2025. Management continues to claim subsidy for the unoccupied unit. No documentation was on file indicating that the resident was no longer residing in their unit. No documentation was on file supporting management's assessment of the absense as temporary. No physician's assessment of likelihood and anticipated timing of return to unit.

Corrective Action Plan

SPM has developed and issued a new company-wide Extended Absence from the Apartment policy applicable to all HUD-assisted and LIHTC communities, including Section 8, PRAC, Section 202, and LIHTC properties. The policy requires written resident notice of any absence expected to exceed 14 consecutive days; documentation supporting the reason for and expected length of the absence (e.g., a physician’s statement, discharge plan, or nursing facility admission/discharge documentation); a maximum absence of 90 consecutive days, extendable to a total of 180 days only with documentation supporting the need for additional time, with any absence beyond 90 days requiring written approval from the Divisional Vice President; and, when a medical absence triggers an interim certification, a determination of whether program rent requires adjustment based on income or benefit changes. All notices, documentation, approvals, and follow-up contacts must be logged on the new Extended Absence Request and Tracking Form and retained in the resident file. MFCS and property management staff — including the Property Manager, Regional Property Manager and Compliance Specialist — are being trained on this policy, and supervisory review of all extended-absence cases will confirm ongoing compliance going forward. Management is also reviewing the specific resident file identified in the finding and is coordinating with the HUD Account Manager to determine the appropriate disposition of assistance payments, certification corrections, and occupancy status in accordance with HUD requirements.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1229982 2026-002
    Material Weakness Repeat
  • 1229983 2026-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 SUPPORTIVE HOUSING FOR THE ELDERLY $2.54M