Finding 1240648 (2025-003)

Statement of Condition: During testing of three HOME-assisted tenant files, we noted that two households did not have a completed annual income recertification on file for the period under audit. As a result, the owner lacked timely documentation to demonstrate continued compliance with HOME income-eligibility requirements for those HOME-assisted units. Criteria: HOME-assisted rental units must be occupied by households that are eligible as low-income families and must continue to satisfy the affordability and occupancy requirements throughout the affordability period. HOME regulations applicable to the projects and period under audit require participating jurisdictions to perform income determinations in accordance with 24 CFR 92.203, and HOME rental housing must meet the occupancy and affordability requirements in 24 CFR 92.252. Effect: Noncompliance with HOME program requirements related to ongoing income eligibility support and documentation Cause: The property did not maintain effective controls to ensure annual recertifications were completed timely for HOME-assisted households. Specifically, the oversight of the management agent was insufficient to ensure timely recertifications. Context: A test was performed to review eligibility of tenants under the HOME program. Two of the three tenant files selected for testing did not include annual recertifications for the period under audit. Questioned Costs: N/A Recommendation: We recommend that the owner and management agent strengthen controls over HOME annual recertifications to ensure that recertifications are completed timely. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding. The delays resulted from issues with the prior management agent. Management has replaced the management agent in question and they have begun completing the overdue recertifications.