Finding 503898 (2024-001)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2024-10-28

AI Summary

  • Core Issue: Tenant lease files are not consistently maintained according to HUD Handbook 4350.3, leading to potential eligibility errors.
  • Impacted Requirements: EIV guidelines, documentation completeness, and timely recertification processes were not followed.
  • Recommended Follow-Up: Management should enhance training, monitoring, and accountability to ensure compliance with HUD requirements.

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: - 2 out of 6 lease files for existing tenants did not follow EIV guidelines, EIV reports were generated outside of the allowed 120-day period. - 2 out of 6 lease files for existing tenants did not contain necessary documentation, files were missing gross rent change forms and latest executed versions of HUD-50059 form. - 2 out of 6 lease files for existing tenants were not certified before required recertification date, one file was 60 days late, second file was 116 days late. - 1 out of 2 lease files for former tenants had late security deposit refund. Cause Management's policies with respect to the determination of 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 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. Recommendations 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: Z. Other. View of Responsible Officials Management agrees with the finding. Management’s plan of action for non-compliance of the HUD Guidelines includes the immediate steps below: 1. Provide additional training and resources to ensure that the staff has a clear understanding of HUD requirements that will include the importance of adhering to procedures and guidelines with a specific focus on the EIV requirements and reporting, along with the timely processing of annual recertifications. 2. Implement increased monitoring and oversight mechanisms to detect and correct compliance issues. 3. Establish clear accountability measures for not following procedures through appropriate corrective actions. 4. Effectively communicate the importance of following procedures to all staff, emphasizing the impact on organizational efficiency and compliance. 5. Encourage a culture of continuous improvement where procedures are regularly reviewed, communicated with the staff and provide regular training of changing circumstances or best practices. Finding Resolutions Status: Resolved

Corrective Action Plan

Management agrees with the finding. Managements Plan of Action for Non- Compliance of the HUD Guidelines includes the immediate steps below: 1. Provide additional training and resources to ensure that the staff has a clear understanding of HUD requirements that will include the importance of adhering to procedures and guidelines with a specific focus on the EIV requirements and reporting, along with the timely processing of annual recertifications. 2. Implement increased monitoring and oversight mechanisms to detect and correct compliance issues. 3. Establish clear accountability measures for not following procedures through appropriate corrective actions. 4. Effectively communicate the importance of following procedures to all staff, emphasizing the impact on organizational efficiency and compliance. 5. Encourage a culture of continuous improvement where procedures are regularly reviewed, communicated with the staff and provide regular training of changing circumstances or best practices.

Categories

HUD Housing Programs Eligibility Subrecipient Monitoring Reporting

Other Findings in this Audit

  • 503899 2024-001
    Material Weakness Repeat
  • 503900 2024-002
    Material Weakness
  • 503901 2024-002
    Material Weakness
  • 503902 2024-003
    Material Weakness
  • 503903 2024-003
    Material Weakness
  • 503904 2024-004
    Material Weakness
  • 503905 2024-004
    Material Weakness
  • 503906 2024-005
    Material Weakness
  • 503907 2024-005
    Material Weakness
  • 1080340 2024-001
    Material Weakness Repeat
  • 1080341 2024-001
    Material Weakness Repeat
  • 1080342 2024-002
    Material Weakness
  • 1080343 2024-002
    Material Weakness
  • 1080344 2024-003
    Material Weakness
  • 1080345 2024-003
    Material Weakness
  • 1080346 2024-004
    Material Weakness
  • 1080347 2024-004
    Material Weakness
  • 1080348 2024-005
    Material Weakness
  • 1080349 2024-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $4.99M
14.157 Supportive Housing for the Elderly ("prac") $451,896