Finding 555736 (2024-002)

Criteria Management is responsible for determining tenant eligibility and maintaining lease files 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 tenants tested did not a have a move in inspection in their lease file. 7 out of 13 new and existing tenants tested did not utilize the Enterprise Income Verification (EIV) system. 5 out of 12 existing tenants tested did not complete the Form 50059 timely. Cause The Project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. 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 None Context A sample of 13 tenant files from a population of 72 were selected. We identified exceptions in 7 out of the 13 files tested. The sample in not a statistically valid sample. Identification as a Repeat Finding Repeat finding of prior year finding 2023-002. Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that tenant security deposits are correctly recorded, 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-ProcessViews of Responsible Officials As there has been a change in the Management Agent, the agent will ensure that the EIV Income Report and annual certifications are completed according to HUD guidelines. The site now has updated its file set-up review to make sure reports have been completed within HUD guidelines and new company policy as well as corporate compliance monitoring.