Finding 46550 (2022-002)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2023-02-27

AI Summary

  • Core Issue: Noncompliance with HUD regulations regarding tenant eligibility and lease file maintenance was identified, including missing EIV report data.
  • Impacted Requirements: Tenant lease files must comply with HUD Handbook 4350.3 to ensure eligibility and proper documentation.
  • Recommended Follow-Up: Management should implement and monitor procedures to ensure compliance with HUD requirements for tenant eligibility and lease file maintenance.

Finding Text

Department of Housing and Urban Development Finding 2022-002 Section 202 Supportive Housing for the Elderly, AL 14.157 Statement of Condition During the procedures applied to a sample of eight tenant lease files, we noted the following instances of noncompliance with HUD regulations regarding tenant eligibility and the maintenance of lease files: One instance where the project did not maintain evidence of EIV report data in the lease file. This is a repeat finding. 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. Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Cause The project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that 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: R. Section 8 program administration (REAC); E. Eligibility (UG) Finding Resolution Status: Unresolved Reporting Views of Responsible Officials Management agrees with the finding. The property was sold subsequent to year end with HUD approval and all tenant files were transferred to buyer, therefore we consider this matter closed.

Corrective Action Plan

CORRECTIVE ACTION PLAN Project Legal Name: Evangeline Booth Garden Apartments Pasadena, TX (? Project of Evangeline Booth Residence, Inc., A Texas Corporation) HUD Project No.: 114-EE095-NP-WAH Audit Firm: CohnReznick LLP Period covered by the audit: 10/1/2021-11/11/2021 (day before sale) 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 2022-001 a. Comments on the Finding and Each Recommendation The auditee agrees with the finding. b. Action(s) Taken or Planned on the Finding The property was sold subsequent to September 30, 2021 reporting period with HUD approval and all reserves were transferred to buyer, therefore we consider this matter closed. 2. Finding 2022-002 c. Comments on the Finding and Each Recommendation The auditee agrees with the finding. The auditee agrees with the recommendation management should either review the Project budget to determine if nonessential costs can be cut to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement or management should obtain HUD approval to waive the remaining underfunded deposits due to the balance of the reserve exceeding $1,000 per unit. d. Action(s) Taken or Planned on the Finding The property was sold November 12, 2021 with HUD approval and all tenant files were transferred to buyer, therefore we consider this matter closed. B. Status of Corrective Actions on Findings Reported in the Schedule of the Status of Prior Year Findings, Questioned Costs and Recommendations 1. Finding 2021-001 Unresolved. See Finding 2022-002. 2. Finding 2021-002 Unresolved. See Finding 2022-001 3. Finding 2021-003 Cleared. 4. Finding 2020-001 Unresolved. See findings 2022-002 and 2021-001. 5. Finding 2020-002 Unresolved. See findings 2022-001 and 2021-002. 6. Finding 2019-002 Unresolved. See findings 2022-001, 2021-002, and 2020-002

Categories

HUD Housing Programs Eligibility Reporting

Other Findings in this Audit

  • 46549 2022-001
    Material Weakness
  • 46551 2022-001
    Material Weakness
  • 46552 2022-002
    Material Weakness
  • 622991 2022-001
    Material Weakness
  • 622992 2022-002
    Material Weakness
  • 622993 2022-001
    Material Weakness
  • 622994 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $4.04M