Finding 395868 (2023-001)

Finding No. 2023-001; Federal Assistance Listing Number 99.999 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 testing: 1. one out of three tenant files tested did not have a recertification performed timely. 2. one out of three tenant files tested did not have third party income verifications to support tenant income on the HUD 50059. Cause Management's policies with respect to the determination of tenant 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 recertifications are performed timely and 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 One out of two tenant files tested did not have a recertification performed timely. And one out of three tenant files tested did not have third party income verifications to support tenant income on the HUD 50059. Repeat Finding Yes, 2022-003 Recommendation Management should monitor compliance with their procedures to ensure that tenant recertifications are performed timely, 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 Administration Finding Resolution Status: Unresolved Views of Responsible Officials and Planned Corrective Actions REACH has policies in place to complete certifications in a timely manner and ensure income support is received for income certifications. Due to staffing shortages and tenant noncompliance issues, the property had issues with compiling the necessary information to complete the 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.