Finding 33325 (2022-001)

-
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-04-24
Audit: 33075
Organization: Revitz House Corporation (MD)

AI Summary

  • Core Issue: Move-in inspections were not documented before lease agreements were signed, violating HUD requirements.
  • Impacted Requirements: Non-compliance with HUD Handbook 4350-3, REV-1, Section 6-29, which mandates joint inspections and documentation.
  • Recommended Follow-Up: Implement control procedures to ensure inspections are completed and documented before lease execution.

Finding Text

Finding No: 2022-1: Section 8 Housing Assistance Program, Assistance Listing No. 14.195 ? Failure to document move-in inspections prior to lease agreement execution. Criteria: HUD Handbook 4350-3, REV-1, Section 6-29 requires that both owner and tenant must jointly inspect the tenant unit before execution of lease and that appropriate signatures be documented on the inspection form. Condition: Based on a sample review of tenant files, 3 out of 8 files did not include a move-in inspection form. Cause: Control procedures were not in place to ensure that documented move-in inspections occurred in accordance with move-in procedures outlined in the HUD Handbook. Effect: The effect is non-compliance with the requirements of the Department of Housing and Urban Development, HUD Handbook 4350-3, REV-1, Section 6-29. Questioned Costs: There were no questioned costs. Context: Revitz House Corporation received federal awards related to HUD?s housing assistance program which requires compliance with the Compliance Supplement and HUD guidelines. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that control procedures be put in place to ensure that no lease is executed until a move-in inspection is completed, the inspection form is signed by both tenant and landlord, and the signed inspection form is placed in the tenant file. Views of Responsible Officials and Planned Corrective Action: In each of the three instances noted, the tenant was an existing tenant converting to Section 8 subsidy. The tenant did not physically change apartments; therefore, a move-in did not take place and a move-in inspection was not completed. Revitz House Corporation now understands that HUD may view this circumstance as a move-in and will put control procedures in place to document move-in inspections in accordance with the HUD Handbook on a go-forward basis.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Action: In each of the three instances noted, the tenant was an existing tenant converting to Section 8 subsidy. The tenant did not physically change apartments; therefore, a move-in did not take place and a move-in inspection was not completed. Revitz House Corporation now understands that HUD may view this circumstance as a move-in and will put control procedures in place to document move-in inspections in accordance with the HUD Handbook on a go-forward basis.

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.195 Section 8 Housing Assistance Payments Program $906,236
14.191 Multifamily Housing Service Coordinators $62,341