Finding 264813 (2022-001)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2023-07-16

AI Summary

  • Core Issue: Tenant lease files are not consistently maintained, leading to potential eligibility errors.
  • Impacted Requirements: Compliance with HUD Handbook 4350.3 regarding tenant eligibility and lease file maintenance is lacking.
  • Recommended Follow-Up: Management should implement and monitor new procedures to ensure proper tenant eligibility determinations and lease file maintenance.

Finding Text

Department of Housing and Urban Development Finding No. 2022-001; Section 8 Project-Based Cluster (14.195) Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Condition and Context In connection with our lease file review we noted the following exceptions: ? 3 out of 9 new tenants tested did not have annual EIV-system income verification performed in a timely manner. Cause Management's policies with respect to the determination of eligibility and the maintenance of tenant lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs were not consistently followed. Effect or Potential Effect The procedures for determining eligibility and maintaining tenant lease files were not consistently applied in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Questioned Costs: N/A Identification as a Repeat Finding: No Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. Auditor Noncompliance Code R - Section 8 program administration

Corrective Action Plan

Legal Name: Housing and Community, Inc. Audit Firm: CohnReznick Period covered by the audit: January 1, 2022 ? December 31, 2022 Corrective Action Plan prepared by: Name: James Butcher Position: SVP of Finance & Accounting Telephone Number: 210-821-4392 1. Current Findings on the Schedule of Findings and Questioned Costs 2. Finding 2022-001 a. Comments on the Finding and Each Recommendation Management did not certify income through the EIV system as part of the initial certification procedures for new tenants. b. Action(s) Taken or Planned on the Finding The management company is highly aware of the importance surrounding the EIV information and timeline of when these reports need to be pulled for documentation and review. We will make sure to provide additional training to ensure we remain in compliance going forward. We have also mandated manager reminders be put in place every time new tenants move in, ensuring the EIV be pulled within 90 days and 120 days prior to annual recertifications being performed for existing tenants. Management has also reviewed this proposed resolution with the Southwest Housing Corporation, the area HUD representative, and they have approved the aforementioned proposed resolution.

Categories

HUD Housing Programs Eligibility

Other Findings in this Audit

  • 841255 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.239 Home Investment Partnerships Program $5.13M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $2.04M
14.218 Community Development Block Grants/entitlement Grants $1.42M
21.011 Capital Magnet Fund $1.30M
14.195 Section 8 Housing Assistance Payments Program $820,728
14.135 Mortgage Insurance_rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate $78,566