Finding Text
Finding 2023-001 Noncompliance with HUD Occupancy Handbook Requirements
Criteria: HUD Housing Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, outlines the items required to be attached to the lease, which includes a Form HUD-50059,
Owner’s Certification of Compliance with HUD’s Tenant Eligibility and Rent Procedures and a move-in inspection report. Both documents are to be signed by both the tenant and owner.
Condition: The Project has 16 units subsidized by HUD. Our sample size was 5 tenants, which included all four tenants who moved-in during the fiscal year and one tenant who lived at the Project the entire fiscal year. • Form HUD-50059 was not located in the tenant file for two of the four new tenants. • Form HUD-50059 was present in the file of yet another new tenant and signed by a Project
representative, however it was not signed by the tenant • A move-in inspection form was signed by the tenant only. It should also include the signature of a Project representative
Cause: Management oversight.
Possible Effect: Failing to maintain a fully completed HUD-50059, especially the initial completion that determines low-income eligibility of the tenant for the length of residency, could result in a tenant to become ineligible for benefits and a return of funds previously received or a termination of the PRAC contract. Recommendations: Management should fully execute the HUD-50059 with the required tenant and owner signatures prior to electronic submission to HUD and retain the original copy in the tenant file. Likewise, the move-in inspection forms should be signed by both the tenant and Project representative to certify agreement of the condition of the unit at move-in.
Management’s Response: Refer to the Corrective Action Plan.