Finding 403280 (2023-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-06-27

Audit: 310458

Organization: Booth Residence Inc., A Georgia Corporation (GA)

Auditor: Cohnreznick LLP

AI Summary

Core Issue: Tenant lease files are missing required documentation for income verification and move-in inspections.
Impacted Requirements: Compliance with HUD Handbook 4350.3 regarding tenant eligibility and lease file maintenance was not consistently followed.
Recommended Follow-Up: Management should enhance internal controls to ensure all tenant file documentation meets eligibility requirements.

Finding Text

Department of Housing and Urban Development Section 8 Housing Assistance Program, AL 14.195 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: -6 out of 9 tenants tested did not have documentation in their lease file that their income was verified using EIV. - 2 out of 2 tenants tested did not have move in inspections in their lease files Cause Management's policies with respect to the determination of tenant 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, and there were no procedures in place to ensure these tasks were performed during transition to new management. Effect The procedures for determining 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: None Context Procedures were not in place during the transition to new management to ensure HUD policies as it relates to tenant eligibility and maintaining tenant lease files were not followed at all times. Identification as a Repeat Finding This finding is not a repeat finding Recommendation We recommend that management review its internal controls over obtaining and maintaining tenant file documentation to ensure compliance with eligibility requirements. Views of Responsible Officials

Corrective Action Plan

Project Legal Name: Booth Residence, Inc., a Georgia Corporation HUD Project No.: 061-11293 Audit Firm: CohnReznick LLP Period covered by the audit: 10/1/2022-9/30/2023 Corrective Action Plan prepared by: Name: Sriparna Mitra Position: HUD Specialist, THQ (Legal) Telephone Number: 404-728-6700 The following is a recommended format to be followed by the auditee for preparing a corrective action plan: A. Current Findings on the Schedule of Findings, Questioned Costs and Recommendations 1. Finding 2023-001 a. Comments on the Finding and Each Recommendation Management agrees with the finding and has taken steps to address the issue that caused it. b. Action(s) Taken or Planned on the Finding An experienced third-party management agent approved by HUD was hired to maintain tenant file documentation and to ensure compliance with HUD eligibility requirements.

Other Findings in this Audit

403281 2023-002

Significant Deficiency
979722 2023-001

Significant Deficiency
979723 2023-002

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
14.155	Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects	$3.74M
14.195	Section 8 Housing Assistance Payments Program	$842,791