Finding Text
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: 1 out of 1 new
tenant tested had EIVs that were not performed in the correct period and that were not
performed outside of 90-day EIV window.
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.
Questioned Costs
N/A
Identification as a Repeat Finding
This finding is not a repeat finding.
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: R. Section 8 program administration
Finding Resolutions Status: Resolved.
View of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirement for security funding. Funds have been transferred and will be maintained based
on HUD requirements in a separate account from operating funds.
Move in EIVs - All move in files will be sent to our in house compliance department and
Franklin Group has an EIV specialist how follows and tracks all moves for accuracy for all
move files and the EIV specialist also sends out the 90 day reminders for all move in.
Existing Tenant EIV - It is the policy that all existing tenant EIV and 120-day reports are run
per the 4350 guidelines. The Community Manager for Renaissance Gardens has been
provided the HUD Trainings and have noted on her daily task reminder from One Site to pull
all reports as required. The RM is required during monthly visits to spot check at least 5
existing tenants.
Gross Rent Change and Medical Reporting - The policy states that all Gross Rent Changes
are to be completed as approved by the new rent schedule - The Community Manager is
required to scheduled appointments with all residents to sign the effective gross rent change
and file in tenants files, it is also required that residents 50059s are signed and in the file,
the Community Manager has taken the latest HUD training with our in house HUD
Compliance Manager- The Regional Manager will also spot check files to be certain that all
Gross Rent Changes are in its 6 part file folders. Medical reporting records were discussed
in our HUD Compliance Training and all expenses must be in the 6-part file folder. Again,
the RM will continue to spot check files during the monthly required inspections. All HUD
Communities were required to participate in the HUD Training as a reminder tool.
Security Deposit - Franklin Companies has a policy that all security deposit refunds must be
submitted within the 3 days move out period. This situation was due to the changeover in
Management.