Kansas City Site Didn’t Comply with Tenant Eligibility and Recertification Requirements
Catalyst: HUD’s Region 7 Office of Multifamily Housing Programs asked HUD’s Office of Inspector General (OIG) to audit a Kansas City site’s Project-Based Section 8 Rental Assistance program. HUD conducted a management and occupancy review in January 2018 and gave the site a “below average” rating. HUD also conducted a tenant file audit and found that the tenant files were noncompliant.
Findings: HUD auditors found that the site didn’t comply with tenant eligibility and recertification requirements when it didn’t review Enterprise Income Verification system reports at recertification, perform physical inspections of units, conduct 90-day income reviews for zero-income tenants, or properly calculate household incomes.
In addition, the site didn’t always have proof of birth and Social Security cards or the Enterprise Income Verification Summary Report in the tenant file, charge tenants the minimum total tenant payment, give tenants applicable deductions, and properly apply rent schedules.
Further, auditors found the site claimed a subsidy payment for an unidentified individual, didn’t always properly verify and document participant assets, authorized additional bedrooms for tenants in the unit without adequate support, processed paperwork with a deceased tenant’s signature, and didn’t always maintain tenant files or support documents. As a result, the owner collected a projected amount of more than $377,000 and $24,295 in ineligible and unsupported housing assistance payments respectively.
Recommendations: The OIG recommended that HUD require the site to repay the projected $377,108 in housing assistance payments for tenants who weren’t eligible for assistance; support or repay $24,295 in unsupported housing assistance payments; and implement appropriate controls, including a formalized process, to use when conducting initial certifications and interim and annual recertifications. The OIG also recommended that the director of the HUD Departmental Enforcement Center consider whether administrative action against the owner is warranted.
- HUD Audit 2020-KC-1001