Finding Text
Finding 2023-01:
Condition: Mary Lee Flagship (the Organization) did not consistently use the Enterprise Income
Verification (EIV) system, as required by HUD. We noted two tenants file did not contain a timely run
EIV report. Client had obtained and used third-party documentation of income and assets for the initial
certification/recertifications.
Criteria: Per 24 CFR 5.233 Mandated Use of HUD’s Enterprise Income Verification (EIV) System,
entities administering assistance under Section 202 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 three tenant files of which one file contained relevant EIV report and two files
did not contain a timely run EIV report. Repeat Finding: Yes
Recommendation: We recommend that the Organization require any personnel performing initial
certifications or recertifications to undergo HUD 202 training regarding the intake process prior to
performing any initial certifications or recertifications. Additionally, we recommend a second person
in the housing office review the tenant file to ensure completeness and compliance with HUD 202
documentation requirements prior to signing the new/amended lease agreement.
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 202
training regarding the initial and recertification process. Additionally, management is staffing the
property with a dedicated property manager that will be responsible for reviewing tenant files for
compliance with HUD procedures including uses of EIV reports and ensure supporting documentation
is maintained in each tenant’s file prior to signing new or amended leases.