Finding Text
Criteria: HUD Consolidated Audit Guide 2004.04 REV CHG-7-Tenant Application, Eligibility, and Recerfifixcation-2 Suggested Audit Procedures-e Select a sample of tenant files-procedure 8, “Determine whether the appropriate security deposit and prorated rent were correctly calculated and collected”.
Condition: During our testing of Tenant Move-in, we noted that prorate of tenant rent was not performed for the following:
Effect: The Project is not following HUD directives regarding the calculation of prorated rent.
Cause: Due to the turnover of the Management Agent and Property Management Staff, proper procedures for prorating of 1st month's rent were not being performed.
Context: A sample of three tenant files was for Testing of Move-in in which all three tenants had instances in which 1st month's rent was not being prorated.
Recommendation: We recommend that Project properly prorate the move-in tenant's 1st-month rent.
Views of Responsible Officials and Corrective Action Plan: No disagreements with the audit finding.