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.
Recommendations
Housing
-
Status2020-KC-1001-001-AOpenClosed$377,108.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on June 14, 2021Require the Englewood Apartments’ owner to repay HUD from non-project funds the projected $377,108 in housing assistance payments for tenants who were not eligible for assistance.
-
Status2020-KC-1001-001-BOpenClosed$24,295.00Questioned Costs
Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.
Closed on June 14, 2021Require Englewood Apartments to support that $24,295 in unsupported housing assistance payments was eligible and accurate. Englewood Apartments’ owner should repay any subsidy overpayments to HUD from non-project sources. Further, the owner should reimburse tenants for overcharged rents or enter into a repayment agreement with tenants who were undercharged due to nondisclosure of income.
-
Status2020-KC-1001-001-COpenClosedClosed on April 08, 2021
Require the Englewood Apartments’ owner to implement appropriate controls, including a formalized process, to use when conducting initial certifications and interim and annual recertifications to ensure that tenants are eligible, housing assistance payments are accurate, and tenant files contain all required documentation to comply with HUD’s and its own requirements. In addition, the updated controls should ensure a layer of management oversight to review all certifications before final approval until such time as onsite management is trained and has been proven to follow HUD’s and its own requirements.
-
Status2020-KC-1001-001-DOpenClosedClosed on March 02, 2021
Ensure that the owner, management agent, and staff complete training to ensure that they understand their duties, including HUD’s and local tenant eligibility and certification requirements.
-
Status2020-KC-1001-001-EOpenClosedClosed on December 22, 2021
Monitor Englewood Apartments to ensure that its staff properly maintains tenant files and completes required certifications in accordance with HUD’s and its own requirements.
-
Status2020-KC-1001-001-FOpenClosedClosed on April 08, 2021
Ensure that Englewood Apartments’ owner and its identity-of-interest management agent provide necessary oversight to its onsite staff.
-
Status2020-KC-1001-002-AOpenClosedClosed on March 24, 2021
Require Englewood Apartments’ owner to further develop a formalized process to use when running and reviewing EIV reports.
-
Status2020-KC-1001-002-BOpenClosedClosed on March 24, 2021
Require Englewood Apartments’ owner to ensure that the management agent and staff complete EIV training to ensure that staff members understand their duties and both HUD’s and Englewood Apartments’ own requirements.
-
Status2020-KC-1001-002-COpenClosedClosed on June 14, 2021
Monitor Englewood Apartments to ensure that it properly runs and reviews the EIV reports.
-
Status2020-KC-1001-002-DOpenClosedClosed on April 08, 2021
Ensure that Englewood Apartments’ owner and its identity-of-interest management agent provide necessary oversight to its onsite staff.
General Counsel
-
Status2020-KC-1001-001-GOpenClosedClosed on September 17, 2020
Take appropriate administrative action, up to and including debarment, against the owner for the violations cited in this report including, amongst others, failure to perform the required inspections to ensure that the units the owner were billing for assistance were decent, safe, and sanitary.