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FINDING NO. 2022-003: INEFFECTIVE OVERSIGHT AND OPERATION OF INTERNAL CONTROLS OVER COMPLIANCE BY MANAGEMENT Volunteer Homes for Elderly, Inc.?s managers did not follow all HUD requirements when going through the tenant recertification process. The tenant files tested for internal controls over compliance contained multiple deficiencies including missing copy of social security card in order to verify social security number; missing income verification; missing Ethnic and Racial Data conformation; incorrect calculation of tenant assets; incorrect income used on HUD Form 50059, and missing tenant signature and date on Resident Rights and Responsibilities acknowledgment. CRITERIA: According to the HUD Handbook 4350.3: 1. All applicant and tenant household members must disclose and provide verification of the complete and accurate social security number assigned to them except for those individuals who do not contend eligible immigration status. 2. Owners must include verification documentation in the tenant file. 3. Owners must gather data about the race and ethnicity of applicants and tenants so that HUD can easily spot possible discrimination, track racial or ethnic concentrations, and focus enforcement actions on owners with racially or ethnically identifiable properties. 4. Owners must verify all income assets, expenses, deductions, family characteristics, and circumstances that affect family eligibility or level of assistance: for savings accounts, use the current balance and for checking accounts, use the average balance for the last six months. 5. Annual income is defined as all amounts anticipated to be received from a source outside the family during the 12-month period following admission or annual recertification and owner calculates projected annual income by annualizing current income. 6. Owners must provide applicants and tenants with a copy of the Resident Rights and Responsibilities brochure at move-in and annual recertification and all family members at least 18 years of age must acknowledge receipt of brochure by signing and dating the acknowledgement. CAUSE OF CONDITION: The management agent did not have systems in place to ensure managers know of and are complying with all HUD requirements pursuant to the HUD Handbook 4350.3. RECOMMENDATION: Auditor recommends management review HUD Handbook 4350.3 and put proper procedures in place to ensure managers know of applicable HUD requirements and are complying with HUD requirements.