Finding 576663 (2023-002)

Finding 2023-02: Condition: The Organization did not use the Enterprise Income Verification (EIV) system, as required by HUD. We noted three tenant files did not contain a timely run EIV report. Criteria: Per 24 CFR 5.233 Mandated Use of HUD’s Enterprise Income Verification (EIV) System, entities administering assistance under Section 811 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8013) must use HUD’s EIV system in its entirety as a third-party source to verify tenant employment and income information during mandatory reexaminations or recertifications of family composition and income. Cause: Inadequate monitoring of internal controls in place over use of EIV reports in initial certifications and recertifications noted during the current year. Effect: Failure to use the EIV system in its entirety may result in the imposition of sanctions and/or the assessment of disallowed costs associated with any resulting incorrect subsidy or tenant rent calculations, or both. Questioned costs: $-0- Context: We noted no timely run EIV reports in examination of three tenant files on two new tenants and one continuing tenant. Repeat Finding: Yes Recommendation: We recommend that the Organization require any personnel performing initial certifications or recertifications to undergo HUD 811 training regarding the intake process prior to performing any initial certifications or recertifications. Additionally, we recommend a second person in the housing office review the tenant file to ensure completeness and compliance with HUD 811 documentation requirements prior to signing the new/amended lease agreement. Reporting Views of Responsible Officials: Management agrees with the finding and will begin an independent review of each tenant file to include examination of EIV reports to determine if there are any discrepancies and take corrective measures. Leasing office staff will undergo additional HUD 811 training regarding the initial and recertification process. Additionally, management is staffing the property with a dedicated property manager that will be responsible for reviewing tenant files for compliance with HUD procedures including uses of EIV reports and ensure supporting documentation is maintained in each tenant’s file prior to signing new or amended leases.