Finding 395862 (2023-001)

Significant Deficiency Repeat Finding
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2024-05-03
Audit: 305485
Organization: Community Housing, Inc. (OR)
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: Timely verification of tenant income using HUD's EIV was not consistently performed, affecting compliance with HUD Handbook 4350.3.
  • Impacted Requirements: Tenant lease files and eligibility determinations were not maintained according to federal guidelines, risking ineligible tenants and incorrect rent subsidies.
  • Recommended Follow-Up: Management should enhance procedures and monitor compliance to ensure timely recertifications and proper maintenance of tenant files.

Finding Text

Finding No. 2023-001; Federal Assistance Listing Number 14.157 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 In connection with our lease file review, we noted that the use of the HUD Enterprise Income Verification ("EIV") to verify three out of four tenants' income tested, was not performed timely. Cause Management's policies with respect to recertifications and 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 tenant recertification 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 Context Three out of four tenants' tenants tested did not have the EIV run timely. Identification as a Repeat Finding Yes 2022-001 Recommendation Management should establish procedures and monitor compliance with those procedures to insure that recertifications are performed timely and signed, 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: E - Eligibility for Uniform Guidance R - Section 8 Program Compliance Finding Resolution Status: Resolved Views of Responsible Officials and Planned Corrective Actions: REACH has policies in place to complete certifications in a timely manner but due to staffing shortages and tenant noncompliance issues the property continued to have issues with timely completion of income certifications in 2023. As new staff are brought onboard training is provided and annual HUD training is completed by all staff. Additional procedures have been implemented in 2023 to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.

Corrective Action Plan

Finding 2023-001– Federal Assistance Listing Number 14.157 Statement of Condition: In connection with our lease file review, we noted that the use of the HUD Enterprise Income Verification ("EIV") to verify three out of four tenants’ income tested, was not performed timely. Corrective Action: REACH has policies in place to complete certifications in a timely manner but due to staffing shortages and tenant noncompliance issues the property continued to have issues with timely completion of income certifications in 2023. As new staff are brought onboard training is provided and annual HUD training is completed by all staff. Additional procedures have been implemented in 2023 to coordinate and provide assistance to on-site staff to ensure that the properties are in compliance.

Categories

HUD Housing Programs Eligibility

Other Findings in this Audit

  • 395863 2023-002
    Significant Deficiency
  • 395864 2023-003
    Significant Deficiency
  • 395865 2023-004
    Significant Deficiency
  • 972304 2023-001
    Significant Deficiency Repeat
  • 972305 2023-002
    Significant Deficiency
  • 972306 2023-003
    Significant Deficiency
  • 972307 2023-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $1.41M
14.239 Home Investment Partnerships Program $750,000