Finding 12519 (2022-001)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2022-10-20
Audit: 17093
Organization: Mary Lee Charles Place (TX)

AI Summary

  • Core Issue: The Organization did not consistently use the EIV system as required by HUD, with one tenant file missing a timely EIV report.
  • Impacted Requirements: Failure to comply with 24 CFR 5.233 may lead to sanctions and incorrect subsidy calculations.
  • Recommended Follow-Up: Conduct independent reviews of tenant files for EIV compliance and ensure strict adherence to internal control procedures.

Finding Text

Condition: Mary Lee Charles Place (the Organization) did not consistently used the Enterprise Income Verification (EIV) system, as required by HUD. We noted one tenant file did not contain a timely run EIV report. Criteria: Per 24 CFR 5.233 Mandated Use of HUD?s Enterprise Income Verification (EIV) System, entities administering assistance under Section 811 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013) must use HUD?s EIV system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income. Cause: Inconsistent monitoring of internal controls in place over use of EIV reports in recertifications and inadequate internal monitoring of tenant files noted during the current year. Effect: Failure to use the EIV system in its entirety may result in the imposition of sanctions and/or the assessment of disallowed costs associated with any resulting incorrect subsidy or tenant rent calculations, or both. Questioned costs: $-0- Context: We examined four continuing tenant files of which three files contained relevant EIV reports and one file which contained an EIV report run over four months after recertification date. Repeat Finding: No Recommendation: We recommend that an independent review of each tenant file to include examination of EIV reports be conducted at initial or recertification by a person not directly involved in the intake or recertification process. Any discrepancies noted in this internal file review could then be corrected in a timely manner. Management should ensure that internal control procedures over use of EIV reports in initial and recertification processes are strictly followed and required EIV reports and other supporting documentation is maintained in each tenant?s file.

Corrective Action Plan

Reporting Views of Responsible Officials: Management agrees with the finding and will begin an independent review of each tenant file to include examination of EIV reports to determine if there are any discrepancies and take corrective measures. Leasing office staff will undergo additional HUD 811 training regarding the initial and recertification process. Additionally, management will utilize an external consultant to review tenant files for compliance with HUD procedures (ie. use of authorized consent and verification forms, EIV reports, etc.) and ensure supporting documentation is maintained in each tenant?s file.

Categories

HUD Housing Programs Subrecipient Monitoring

Other Findings in this Audit

  • 12520 2022-002
    Significant Deficiency
  • 588961 2022-001
    Significant Deficiency
  • 588962 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.04M