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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Englewood Apartments’ Project-Based Section 8 Rental Assistance program based on a request from HUD’s Region 7 Office of Multifamily Housing Programs.  HUD conducted a management and occupancy review in January 2018 to assess the overall quality of management and services provided in accordance with HUD guidelines and instructions.  Overall, Englewood Apartments received a “below average” rating.  HUD also conducted a tenant file audit and found that the tenant files were noncompliant.  Our objective was to determine whether the Englewood Apartments' ownership and staff managed its Project-Based Section 8 Rental Assistance program in accordance with applicable requirements.

We found that Englewood Apartments did not comply with tenant eligibility and recertification requirements when it did not 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, it did not 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, Englewood claimed a subsidy payment for an unidentified individual, did not always properly verify and document participant assets, authorized tenants additional bedrooms in the unit without adequate support, processed paperwork with a deceased tenant’s signature, and did not 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.

We recommend that HUD require Englewood Apartments to (1) repay the projected $377,108 in housing assistance payments for tenants who were not eligible for assistance; (2) support or repay $24,295 in unsupported housing assistance payments; and (3) implement appropriate controls, including a formalized process, to use when conducting initial certifications and interim and annual recertifications.  We also recommend that the Director of the HUD Departmental Enforcement Center consider whether administrative action against the owner is warranted.