Finding Text
Untimely Update of Tenant Rent Records between HUD 50059 and Rent Roll
Findings Resolution Status: In Process
Information on Universe Population Size: 50 Tenants
Sample Size Information: 5 Samples
Auditor Non-Compliance Code Drop-Down: Eligibility
Criteria: According to HUD regulations, property owners are required to maintain accurate and up_x0002_to-date rent records. This is essential for ensuring compliance with HUD's requirements and avoiding
discrepancies that could lead to improper subsidy payments, audit findings, or regulatory non_x0002_compliance. Specifically, HUD Handbook 4350.3 outlines the need for accurate tenant rent records
and rent calculations to accurately match with the HUD Form 50059.
Additionally, HUD emphasizes the importance of timely updates to tenant rent records to reflect any
changes in rent amounts. Failure to comply with these requirements, even for a short period, needs to
be documented to ensure transparency and accountability.
Condition: During the review, discrepancies were identified in all five (5) sampled units where the
contract rent per HUD Form 50059 did not match the current leased rate per the Rent Roll. The
discrepancies appear to have resulted from the Rent Roll not being updated, at the time of the testing,
to reflect the approved rent increase indicated in the rent schedule, effective December 1, 2024. This
rent increase is correctly reflected in Form 50059, leading to the noted variance.
Additionally, 1 out 5 of the sampled units have a discrepancy between the subsidy amount recorded
in HUD Form 50059 and the Rent Roll:
Unit 1062 – Subsidy per HUD 50059: $949, Subsidy per Rent Roll: $1,113
Cause of Condition: The discrepancies were primarily due to:
a) Lack of timely updates to of Rent Roll after rent adjustments in Rent Schedule and HUD
Form 50059.
b) Insufficient review procedures to ensure consistency between Form 50059 and the Rent Roll.
c) Absence of internal controls or periodic reconciliations to identify and correct discrepancies.
Potential Effect of Condition: Failure to maintain accurate and up-to-date rent adjustments in the Rent
Roll, it may result in the ff:
Incorrect rent collection, misstatements in financial records, and challenges in reconciling tenant
payments.
Improper subsidy calculations and tenant billing, leading to potential financial adjustments or
repayments
HUD non-compliance, which could trigger audit findings, corrective actions, or potential
penalties.
Questioned Costs: $4,613
Reporting Views of Responsible Officials: The Organization agrees with the findings and
recommendations and will adhere to the corrective action plan.
Recommendation: To address the identified discrepancies and improve compliance, we recommend
the following actions:
1. Establish a Routine Rent Roll Update Process – Implement a formal process to ensure that all
rent adjustments, including those reflected in HUD Form 50059, are promptly and accurately
updated in the Rent Roll.
2. Enhance Oversight and Internal Controls – Strengthen review and approval procedures for rent
adjustments by designating responsible personnel to verify updates before finalizing financial
records.
3. Conduct Periodic Reconciliations – Regularly reconcile the Rent Roll with HUD Form
50059 and the approved rent schedule to identify and correct discrepancies in a timely
manner.
4. Provide Staff Training – Offer ongoing training for staff responsible for rent administration
to reinforce the importance of maintaining accurate and up-to-date rental records in
compliance with HUD regulations.
5. Implement Monitoring and Audit Procedures – Establish periodic internal audits and
management reviews to detect and address discrepancies early, reducing financial reporting
risks and ensuring compliance with subsidy requirements.
Management Response: Management is currently conducting a comprehensive review of the process
to ensure alignment with compliance requirements and identify areas for improvement.