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)
● Section 8 Housing Assistance Payments Program (ALN# 14.195)
Criteria. Under Section 8 of the Housing Act of 1937 and 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. Project management is also responsible for disbursing refunds to former tenants within 60 days of move out.
Condition. Out of a sample of 8 tenant files, we noted three instances where an EIV was not run for a tenant within 90 days of move in. Additionally, out of a sample of 8 tenant files, we noted one instance where a refund check was not disbursed to the tenant within 60 days of move out.
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, employees did not follow HUD guideline procedures. While there were no differences in the amount of subsidies allowed upon review of the subsequent EIV compared to subsidies received, the lack of effective internal controls could lead to future significant noncompliance. Additionally, a former tenant was not disbursed a refund in a timely manner under the HUD guidelines.
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, existing, and former resident files and ensure that this review occurs on a timely basis. Further, we recommend that management ensure HUD guideline procedures be followed.
View of Responsible Officials. Management agrees with this comment and has prepared a corrective action plan.