Finding 571352 (2023-002)

Significant Deficiency Repeat Finding
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2025-07-15
Audit: 362297
Auditor: Cohnreznick LLP

AI Summary

  • Core Issue: Four out of eight tenant files lacked required 3rd party income verification, violating eligibility requirements.
  • Impacted Requirements: Compliance with the State of Oregon Housing and Community Services HOME Program Compliance Manual was not consistently followed.
  • Recommended Follow-up: Management should implement and monitor procedures to ensure timely recertifications and proper maintenance of tenant lease files.

Finding Text

Finding No. 2023-002 - Uniform Guidance Compliance Requirement Code: E-Eligibility - Significant Deficiency HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 HOME Investment Partnership Program Entity Identifying Number Initial year Finding instances Passed-through State of Washington: Cascadia Village - HUD 02-40420-008 2002 1 Passed-through Clark County: Covington Commons - HUD 2011-HOME-11H01 2011 1 McCallister Village (Fruit Valley) 2010-HOME-0H0 2010 1 Passed-through City of Vancouver: McCallister Village (Fruit Valley) 2010-HOME-601002 2010 1 Total instances 4 Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Condition In connection with our lease file review, we noted four instances of eight tenants tested where management did not provide support that they performed a 3rd party income verification in accordance with policy. Cause Management's policies with respect to recertifications and eligibility and the maintenance of tenant lease files in accordance with Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual were not consistently followed. Effect or Potential Effect This could result in units being rented to ineligible tenants. Questioned Costs: Not applicable. Context In connection with the procedures applied to our HOME units testing, four of the eight tenants tested did not have a 3rd party income verification performed in accordance with policy. Repeat Finding: Yes - Finding 2022-002 Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that recertifications and correct income verification procedures are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Views of Responsible Officials For the properties in Washington, they have several sources of HOME funds based on the issuing jurisdiction State, County or City that adds a layer of complexity to the recertification process and due to staffing turnover, both at the properties and REACH main office some of the HOME third party income verifications were missed at recertification. Management has established policies and procedures for complying with the HOME program which includes a centralized tracker for HOME certifications.

Corrective Action Plan

Finding No. 2023-002 HUD HOME Investment Partnerships Program Federal Assistance Listing Number #14.239 Uniform Guidance Compliance Requirement Code: E-Eligibility Criteria Tenant lease files are required to be maintained and tenant eligibility determined in accordance with the Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Condition In connection with our lease file review we noted four instances of eight tenants tested where management did not provide support that they performed a 3rd party income verification in accordance with policy. Cause Management’s policies with respect to recertifications and eligibility and the maintenance of tenant lease files in accordance with Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual were not consistently followed. Effect or Potential Effect This could result in units being rented to ineligible tenants. Questioned Costs: Not applicable. Context In connection with the procedures applied to our HOME units testing, four of the eight tenants tested did not have the a 3rd party income verification in accordance with policy. Repeat Finding: Yes - Finding 2022-002 Recommendation Management should establish procedures and monitor compliance with those procedures to ensure that recertifications and correct income verification procedures are performed timely, tenant eligibility is correctly determined and that tenant lease files are properly maintained in accordance with the requirements of Compliance in State of Oregon Housing and Community Services HOME Program Compliance Manual. Views of Responsible Officials For the properties in Washington, they have several sources of HOME funds based on the issuing jurisdiction State, County or City that adds a layer of complexity to the recertification process and due to staffing turnover, both at the properties and REACH main office some of the HOME 3rd party income verifications were missed at recertification. Management has established policies and procedures for complying with the HOME program which includes a centralized tracker for HOME certifications.

Categories

Eligibility HUD Housing Programs Significant Deficiency

Other Findings in this Audit

  • 571351 2023-001
    Significant Deficiency Repeat
  • 571353 2023-003
    Significant Deficiency Repeat
  • 571354 2023-004
    Significant Deficiency
  • 571355 2023-005
    Significant Deficiency
  • 571356 2023-006
    Significant Deficiency Repeat
  • 571357 2023-007
    Significant Deficiency
  • 1147793 2023-001
    Significant Deficiency Repeat
  • 1147794 2023-002
    Significant Deficiency Repeat
  • 1147795 2023-003
    Significant Deficiency Repeat
  • 1147796 2023-004
    Significant Deficiency
  • 1147797 2023-005
    Significant Deficiency
  • 1147798 2023-006
    Significant Deficiency Repeat
  • 1147799 2023-007
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $1.76M
14.275 Housing Trust Fund $1.63M
99.999 Low Income Housing Preservation and Resident Homeownership Act of 1990-Capital Grant $964,955
14.195 Section 8 Housing Assistance Payments Program $536,176
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $527,343
21.000 Section 607(e ) of the Neighborhood Reinvestment Corporation Act, As Amended $432,750
14.241 Housing Opportunities for Persons with Aids $380,000
14.239 Home Investment Partnerships Program $214,929