FAC Explorer

Finding 7161 (2023-001)

-
Requirement
A
Questioned Costs
-
Year
2023
Accepted
2024-01-03
Audit: 9245
Organization: Woodland Housing Opportunities, Inc. (OH)
Auditor: Whited Seigneur Sams & Rahe LLP CPAS

AI Summary

  • Core Issue: The Project is not following HUD occupancy rules, specifically missing signatures on required forms for tenant eligibility.
  • Impacted Requirements: HUD-50059 forms lack tenant signatures, and move-in inspection reports are incomplete, risking tenant eligibility and funding.
  • Recommended Follow-up: Ensure all required forms are fully signed by both tenants and management before submission and keep originals in tenant files.

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.

Corrective Action Plan

The paper work items identified in the annual audit of Carr Street apartments were the result of a staffing shortage and ultimately a change in staffing. With that said, the following plan highlights actions that already have taken place and are in process of being taken by the Owner and Management Agent for Carr Street Apartments to ensure any instability in staffing does not impact future operations. 1. General Management and Supervision – The management agent has designated the Director of Facilities to provide direct oversight to the staff responsible to for the day-to-day operations of the Carr Street apartments. Likewise, the Director of Facilities has been trained in all HUD processes and can act as a back-up to ensure all required processes are completed. 2. Staffing – A new Housing Case Manager has been hired who has considerable experience managing two HUD subsidized apartments. 3. Quality Improvement Activities – The owner is currently in the process of developing a peer led QI process. At this stage, management is using the HUD form 9834 as well as internal processes to develop a review and rating document. This document will be used by the current Housing Case Manager as well as two other internal Housing Case Managers. The process will involve the Housing Case Managers doing random file audits as well as to perform audits at the time of new tenant move in, cert/recert and move out. As stated, this program is currently in development, but the plan is for the group to meet once per quarter and review at least three existing tenant files. These same activities will take place on a rolling/as needed basis for all move ins, certifications or move outs to ensure the process was performed correctly and in real time.

Categories

Eligibility HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $81,853