Finding Text
FINDING 2022-1 (CORRECTIVE ACTION COMPLETED) Questioned Costs: Not quantifiable given the nature of the finding Population Size: 111 tenants total, 88 subsidized tenants total Sample Size: 20 subsidized tenants Noncompliance Information: 2 subsidized tenants Condition: Enterprise Income Verification (EIV) Income Reports for recertification of tenant family composition and income were not documented in some of the tenant files for the year. This is a finding of noncompliance and a finding of significant deficiencies in internal control over this compliance area. Criteria: HUD Handbook 4350.3 REV-1 requires that the Organization must use EIV Income Report as a third-party source to verify a tenant?s employment and income during mandatory recertifications (annual and interim) of family composition and income. The EIV Income Report is required to be in the tenant file to demonstrate the owner?s compliance with mandated use of EIV as the third-party source to verify tenant employment and income information. Cause: Management inadvertently misfiled the hard copies of the EIV Income Reports at the time of (re)certification instead of retaining them in the tenant file. Effect or Potential Effect: The Organization was not in compliance with the requirements of HUD. The risk of receiving an improper subsidy was increased, accordingly. Recommendations (2022-1-a): We recommend that management implement procedures and controls to ensure that the EIV system is used during reexaminations and recertifications and that documentation of such is retained in the tenant files going forward. View of Responsible Officials: Management concurs with this finding and agrees with the auditor?s recommendation. Management will reevaluate its system to ensure future compliance.