Finding 485721 (2023-001)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2024-09-04
Audit: 318543
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: Tenant eligibility procedures were not consistently followed, leading to potential inaccuracies in tenant lease files.
  • Impacted Requirements: Compliance with HUD Handbook 4350.3 was lacking, specifically regarding timely use of the EIV system and accurate income reporting.
  • Recommended Follow-Up: Management should implement and monitor new procedures to ensure proper tenant eligibility determination and lease file maintenance.

Finding Text

Criteria - Eligibility 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 out lease file review, we noted the following deficiencies: 2 out of 8 tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. 1 out of 8 tenants tested did not have the accurate amount of adjusted annual income reported on HUD Form 50059. 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. Effect or Potential Effect The procedures for determining tenant 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 The sample is not considered a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish procedures and monitor compliance with those procedures to insure 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 Finding Resolution Status: In-process Views of Responsible Officials The onsite team members have received refresher training and have the EIV binder available. They have also set calendar reminders to make sure that EIV reports are pulled in a timely manner. The regional manager will be following up with the onsite staff to make sure they are in compliance.

Corrective Action Plan

Each resident’s information is processed before moving in to ensure they don’t have tenancy elsewhere. Going forward, we will ensure that EIV data is ran within 90 days. We have checklists that the property manager follows when processing a tenant and the regional manager has gone over it and made some modifications. Going forward, management will ensure that the EIV system is utilized correctly and accurate amount of adjusted annual income is reported on the HUD Form 50059.

Categories

HUD Housing Programs Eligibility

Other Findings in this Audit

  • 485722 2023-002
    Material Weakness
  • 1062163 2023-001
    Material Weakness
  • 1062164 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $6.39M
14.239 Home Investment Partnerships Program $137,644