Finding Text
During the procedures applied to a sample of nine tenant lease files, we noted the following
instances of noncompliance with HUD regulations regarding tenant eligibility and the
maintenance of lease files. The instances of noncompliance were isolated to five of the nine
tenant files.
1. Five instances where the annual recertification process for a tenant was not performed in a
timely manner.
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.
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
Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or
errors in the rent subsidies paid by HUD.
Recommendation
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
S. Internal control deficiencies
Finding Resolution Status
In process
Reporting Views of Responsible Officials
Management made improvements to internal controls surrounding the recertification process
when initially made aware of procedures not being performed timely and in accordance with
HUD guidelines. Management monitors those initial improvements in internal controls as well as
continually makes additional adjustments, as deemed necessary, to tighten these internal
controls. Management's improvements to the controls consist of the following:
1. Recertification reminder letters are being consistently sent to residents at 120, 90, 60, and
30 days prior to recertification date.
2. Incentives were put in place to encourage site associates to complete recertification tasks
timely including staff lunches. After working hour sessions are also being held.
3. Third party consultants are being utilized when necessary.
4. A HUD specialist was hired during the year to address ongoing terminations and ensure site
teams were aware of current and upcoming terminations related to the Section 8 program
(improvement of control that occurred during 2024).
5. Site associates are going door to door and enlisting help from resident services teams to
engage residents.