Finding Text
2023-001 – Eligibility - Tenant File Documentation
Finding Type. Immaterial noncompliance; Significant deficiency in internal control over compliance (Eligibility)
Federal program
U.S. Department of Housing and Urban Development
· Supportive Housing for the Elderly (ALN# 14.157)
Criteria. Under Section 202 of the National Housing Act of 1959, Project management is responsible for performing an examination of and obtaining support for items of income, assets, and expenses, for proper calculation of tenant assistance payments of applying residents, and annual recertification and calculation of such information thereafter, and for obtaining signed and properly completed forms.
Condition. Out of a sample of 6 tenant files, we noted:
1) Two out of six instances where an EIV was not run for a tenant file within 90 days of move in;
2) One out of six instances where the incorrect tenant income was used to calculate the tenant assistance payment;
3) One out of six instances where a tenant moved out and the requested overages were not adjusted for the correct time period;
In addition, procedures were not in place to document the applicants, admissions, and removals to and from the tenant waitlist.
Cause. Management does not appear to have sufficient internal control procedures in place to properly implement all of HUD's program requirements.
Effect. As a result of this condition, certain tenant files did not contain all required supporting documentation and tenant application, waitlist, and removal history was not able to be tracked. In addition, employees did not follow HUD guideline procedures, and/or did not properly calculate the tenant subsidy in HUD Form 50059. While there were no significant differences in the amount of subsidies allowed compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance.
Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted.
Recommendation. We recommend that management should strengthen their current policies and follow a documented review process for all new and existing resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure all proper supporting documentation is maintained in the residents' files, HUD guideline procedures be followed, and tenant subsidies be appropriately calculated. A tenant application waitlist should also be established and maintained such that applications, admissions, and removals can be documented.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.