Finding Text
Finding 2021-008 – Special Tests and Provisions – Material Weakness
Name of Federal Agency: Department of Housing and Urban Development
Federal Program Name and Assistance Listing Number: Supportive Housing for Persons
with Disabilities (Section 811), Assistance Listing 14.181
Federal Award Identification Number and Year: N/A and 1997
Name of Pass-through Entity: N/A
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 one out of two tenants tested did not have
documentation in their lease file that their income was verified.
Cause
Management did not have internal controls in place to ensure tenant income was verified.
Effect or Potential Effect
The procedures for determining tenant eligibility and maintaining 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
None.
Context
See the context of the finding detailed in the condition section above.
Identification as a Repeat Finding
This finding is not a repeat finding.
Recommendation
Management should establish procedures and monitor compliance with those procedures to ensure
that tenant eligibility is correctly determined and that the 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: Unresolved.
Views of Responsible Officials
HES agrees with the finding and the auditor's recommendations will be adopted.