Finding 396702 (2023-001)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-05-15

Audit: 306332

Organization: The Harry and Jeanette Weinberg House, Inc. (MD)

Auditor: Cohnreznick LLP

AI Summary

Core Issue: Tenant lease files are not being maintained properly, leading to eligibility checks being performed outside the required 120-day window.
Impacted Requirements: Compliance with HUD Handbook 4350.3 is not consistently met, risking ineligible tenants and incorrect rent subsidies.
Recommended Follow-Up: Review and reinforce management policies to ensure adherence to HUD guidelines for tenant eligibility and lease file maintenance.

Finding Text

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 the following deficiencies: Six out of eleven existing tenants tested had EIVs that were performed outside of the 120-day EIV window. Cause Management's policies with respect to 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 security deposits 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.

Corrective Action Plan

The Franklin Johnston group has strict EIV policies and procedures in place. Although HUD requires quarterly reports, we require monthly reports for our Master Binder. Site teams are only permitted to pull the “By Head of Household Report” at the time of the recertification appointment. They do not pull 120 ,90 , 60 or 30 days in advance. The report is pulled at the time the recertification packet is completed. The site teams pull this report 90 days after a MI is submitted to TRACS. We pull this report 90 days that a resident receives a utility check as well. There are other EIV reports as it relates to specific tasks. All site teams members have been trained as it relates to this policy. In addition to this training all site teams are required to attend monthly EIV training.

Other Findings in this Audit

396703 2023-001

Material Weakness
973144 2023-001

Material Weakness
973145 2023-001

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
14.157	Supportive Housing for the Elderly	$503,793