Finding Text
2023-002 Internal Controls over Documentation in Tenant Files (Eligibility)
Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low-income housing and that the amount of rent charged to tenants is calculated according to HUD rules and regulations.
Condition: The authority had the following noncompliance instances out of the 40 tenant files selected out of 163 total units for testing:
• 2 files did not have the appropriate annual recertification performed
• 2 files did not contain a signed lease by the tenant
• 13 files did have income verifications performed
• 3 files did not contain appropriate verification of social security numbers and birth certificates of household members
• 4 files did not contain a current Form 9886
• 7 files did not contain a current 50058 form
• 12 files did not have signed citizenship forms
• 15 files did not have annual rent determination forms
• 8 files did not have the appropriate lead-based paint acknowledgement forms
• 1 tenant was admitted to the program but was over-income
• 34 files did not have an annual inspection performed during the year
Questioned
Costs: $14,080
Effect: The Authority is not in compliance with applicable HUD regulations regarding tenant eligibility and rent calculations.
Cause: The Authority does not have proper procedures in place related to tenant certification and does not have a review procedure in place to detect errors timely.
Recommendation: The Authority should establish proper procedures to ensure that the Authority is in compliance with HUD rules for verification of tenant information and calculation of tenant rent. In addition, the Authority should implement review procedures in order to detect errors timely.
Management
Response: The Authority was NOT provided the listing of the 40 tenant files reviewed with the issues related to each file. This was requested of the auditor when the draft audit report was provided to the Authority and has not been received. The Authority did receive a listing of 13 files but this listing did not contain specifics for each of the tenants listed as to how they fit into this finding.