Solace LLC, Rexburg, ID Section 8 Housing Assistance Payments Program Office of Audit, Region 10 Audit Report Number: 2016-SE-1003 Seattle, WA September 12, 2016 To: Thomas W. Azumbrado, Director, San Francisco Multifamily Housing Hub, 9AHMLAP //signed// From: Ronald Hosking, Regional Inspector General for Audit, 0AGA Subject: Solace LLC, Rexburg, ID, Did Not Always Correctly Compute Tenant Annual Income, Conduct Timely Tenant Income Verifications, or Request the Appropriate Assistance When Tenants Moved Out Attached is the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s (OIG) final results of our review of Solace LLC’s Section 8 housing assistance payments program. HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on recommended corrective actions. For each recommendation without a management decision, please respond and provide status reports in accordance with the HUD Handbook. Please furnish us copies of any correspondence or directives issued because of the audit. The Inspector General Act, Title 5 United States Code, section 8M, requires that OIG post its publicly available reports on the OIG Web site. Accordingly, this report will be posted at http://www.hudoig.gov. If you have any questions or comments about this report, please do not hesitate to call me at 913-551-5870. Audit Report Number: 2016-SE-1003 Date: September 12, 2016 Solace LLC, Rexburg, ID, Did Not Always Correctly Compute Tenant Annual Income, Conduct Timely Tenant Income Verifications, or Request the Appropriate Assistance When Tenants Moved Out Highlights What We Audited and Why We audited Solace LLC’s Section 8 housing assistance payments program because of the results of our previous audit of another multifamily property. The person responsible for housing assistance program issues at the other property was also Solace’s manager. Our objectives were to determine whether Solace correctly computed tenant annual income, conducted timely tenant income verifications, and requested assistance for tenants after they moved out. What We Found Solace did not always correctly compute tenant annual income or conduct timely tenant income verifications. As a result, it overcharged the U.S. Department of Housing and Urban Development (HUD) more than $7,100 for housing assistance and overcharged three tenants more than $700. In addition, Solace requested housing assistance for tenants after they had moved out and overcharged HUD almost $600 for these tenants. What We Recommend We recommend that the Director of the San Francisco Office of Multifamily Housing Programs require Solace to (1) provide support for $6,804 in overcharged housing assistance that was based on unverified income and reimburse HUD any amount that remains unsupported; (2) reimburse HUD $320 in overcharged assistance and $584 that it charged for tenants who had moved out; (3) reimburse three tenants who overpaid rent by $714; (4) conduct periodic reviews of tenant files to ensure that its manager correctly calculates housing assistance payments, adequately documents the completion of required annual recertifications, and does not request assistance from HUD for tenants after they move out. We also recommend that the Director provide technical assistance to ensure that Solace’s manager understands the requirements in the Monthly Activity Transmission Guide, paragraph 7-12(E), and review Solace’s tenant files 1 year later to determine whether this requirement is understood and being followed. Table of Contents Background and Objectives ....................................................................................3 Results of Audit ........................................................................................................4 Finding 1: Solace Did Not Always Correctly Compute Tenant Annual Income or Conduct Timely Tenant Income Verifications ............................................................... 4 Finding 2: Solace Requested Assistance for Tenants After They Had Moved Out ... 6 Scope and Methodology ...........................................................................................8 Internal Controls ......................................................................................................9 Appendixes ..............................................................................................................10 A. Schedule of Questioned Costs .................................................................................. 10 B. Auditee Comments and OIG’s Evaluation ............................................................. 11 C. Incorrect Assistance Amounts Noted in Tenant Files ........................................... 15 D. Criteria ....................................................................................................................... 16 2 Background and Objectives Solace LLC Solace LLC is the owner of Rexburg Plaza Apartments, a 40-unit multifamily property in Rexburg, ID. Solace has owned and managed Rexburg Plaza since June 2006. The U.S. Department of Housing and Urban Development (HUD) made housing assistance payments to Solace under a Section 8 contract that covered all 40 units. During our audit period, HUD provided Solace more than $763,000 in Section 8 housing assistance payments. Figure 1 Rexburg Plaza Apartments Figure 2 Rexburg Plaza Apartments Section 8 Housing Assistance Payments Program The project-based Section 8 housing assistance payments program provides rental assistance to low-income individuals and families, enabling them to live in affordable, decent, safe, and sanitary housing. HUD makes the assistance payment to the owner of an assisted unit on behalf of an eligible family, defined as having income at or below 80 percent of the area median income adjusted for family size. The family pays the higher of (1) 30 percent of its monthly adjusted income, (2) 10 percent of its monthly income, (3) welfare rent (if applicable), and (4) $25 minimum rent. The owner or management agent calculates the amount of the assistance payment, which is the difference between the contract rent and the family’s share of the rent. The owner is responsible for reexamining the family’s income and composition at least once each year and adjusting the amount of assistance payments accordingly. Our objectives were to determine whether Solace (1) correctly computed tenant annual income, (2) conducted timely tenant income verifications, and (3) requested assistance for tenants after they moved out. 3 Results of Audit Finding 1: Solace Did Not Always Correctly Compute Tenant Annual Income or Conduct Timely Tenant Income Verifications Solace did not always correctly compute tenant annual income or conduct timely tenant income verifications. This condition occurred because Solace lacked a process for reviewing its manager’s income verifications and calculations. As a result, it overcharged HUD more than $7,100 for housing assistance and overcharged three tenants more than $700. Unperformed Income Verifications Of the 13 tenants reviewed, the manager did not reverify one tenant’s income when reinstating his assistance. To ensure that assisted tenants pay rents according to their ability to pay, HUD Handbook 4350.3 requires owners to verify income, assets, expenses, deductions, and all eligibility requirements before move-in. In addition, it requires that owners recertify family income and composition at least annually. If a tenant does not receive assistance payments and then later begins receiving them, the annual recertification date will change to the first day of the month in which the tenant began receiving that assistance. The manager agreed that she should have processed this tenant’s reinstatement like a move-in or an annual reexamination and verified all of the necessary information at that time. However, the tenant file contained no recent documentation to support the tenant’s education grants or his bank balances. Verification documents are valid for only 120 days, yet the previous documentation verifying these items was dated roughly 1 year before the reexamination date. Incorrect Annual Income Solace’s manager did not always correctly calculate annual income for its tenants. HUD Handbook 4350.3 requires owners to verify tenants’ income and accurately calculate their rents. However, the manager made mathematical errors when determining the annual income for 6 of the 13 tenants, such as not averaging the income over the correct number of pay periods or hours. Similarly, the manager did not apply one tenant’s veterans’ benefits over the correct number of months, and when determining another tenant’s overtime income, the manager failed to include all of the overtime documented for the period. The manager also included financial aid income when it should have been excluded for one tenant and excluded it for another tenant when it should have been included. Inadequate Review Process Solace did not have a review process to assess whether its manager verified tenant income and accurately calculated the tenants’ housing assistance payments before requesting funds from HUD. Not only did the manager compute the assistance amounts, but she also submitted the payment requests to the HUD performance-based contract administrator that is responsible for managing Section 8 assistance in Idaho. This manager was the only administrative staff member onsite, and when Solace’s owner visited Rexburg Plaza, he reviewed the property’s financial position but did not examine the manager’s housing assistance calculations or the tenant files. 4 Unsupported and Overcharged Assistance and Rent Solace charged HUD more than $6,800 in housing assistance for the reinstated tenant. Without the required verifications, this recertification was incomplete. Therefore, the monthly assistance amount was unsupported. The $6,800 unsupported amount was the total of housing assistance charged for the 12 months after reinstatement and until Solace processed the next recertification. Solace overcharged HUD for more than $300 in housing assistance because the manager calculated lower tenant income than the verification documents supported. This error resulted in undercharging rent to the tenants and overcharging HUD for the difference. Solace overcharged three of its tenants more than $700 for rent because the manager calculated higher tenant income than the verification documents supported. This error resulted in overcharging rent to the tenants and undercharging HUD for the difference. Solace could put these funds to a better use by implementing our recommendation to refund the overpaid rent to the tenants. These amounts are the difference between the correct monthly rent and assistance amounts and the amounts charged to the tenant and HUD, multiplied by the number of months the charges were incorrect. Appendix C shows the individual amounts of incorrect rent and assistance charges. Recommendations We recommend that the Director of the San Francisco Office of Multifamily Housing Programs require Solace to 1A. Provide support for the $6,804 in housing assistance that was based on the unverified income and reimburse HUD any amount that remains unsupported. 1B. Reimburse HUD the $320 in overcharged housing assistance. 1C. Reimburse the three tenants who overpaid rent by $714. If HUD agrees to reimburse Solace for the $714 in underpaid assistance, Solace could use these funds to reimburse the tenants. 1D. Recalculate the housing assistance charged for the 35 units not sampled during our audit, reimburse HUD for any overcharged assistance amounts, provide support for any unsupported amounts, and reimburse tenants for any overcharged rents. 1E. Conduct periodic reviews of tenant files to ensure that its manager correctly calculates the housing assistance payments and adequately documents completion of the required annual recertifications. 5 Finding 2: Solace Requested Assistance for Tenants After They Had Moved Out Solace requested housing assistance for tenants after they had moved out. This condition occurred because Solace did not have a process in place to adequately supervise its manager. As a result, it overcharged HUD almost $600 for tenants who had moved out. Post-Move-Out Assistance For four of the five tenants reviewed, Solace continued to request housing assistance between 3 and 16 days after the tenant moved out. The Monthly Activity Transmission Guide, however, limits assistance payments to the period when the tenant occupied the unit. Inadequate Review Process Solace did not have a review process to assess whether its manager accurately applied HUD rules. The manager’s immediate supervisor was the owner. During his visits to Rexburg Plaza, the owner reviewed the property’s financial positions but did not examine the tenant files. Overcharged Assistance Solace overcharged HUD almost $600 for tenants who had moved out. This amount was the prorated assistance charged for the four tenants after evidence of their departure. The table below shows the number of days and amounts Solace charged HUD for assistance after the four tenants moved out. Move-out Assistance Days Post-move-out Unit Tenant date end date late assistance paid 107 Tenant 1 8/28/2013 8/31/2013 3 $83 306 Tenant 2 9/30/2015 10/6/2015 6 100 407 Tenant 3 4/30/2013 5/15/2013 15 72 506 Tenant 4 12/20/2015 1/5/2015 16 329 Total 584 Recommendations We recommend that the Director of the San Francisco Office of Multifamily Housing Programs 2A. Require Solace to reimburse HUD the $584 it paid in post-move-out assistance for four tenants. 2B. Provide technical assistance to ensure that Solace’s manager understands the requirements in the Monthly Activity Transmission Guide, paragraph 7-12(E), and review Solace’s tenant files 1 year later to determine whether this requirement is understood and being followed. 2C. Require Solace to review the 49 tenant files not sampled during our audit, determine whether HUD paid additional housing assistance for tenants after they 6 had moved out, and have Solace reimburse HUD for any additional post-move- out assistance it paid. 2D. Require Solace to conduct periodic reviews of tenant files to ensure that its manager does not request assistance from HUD for tenants after they have moved out. 7 Scope and Methodology We performed our fieldwork in February 2016 at Rexburg Plaza Apartments located at 430 West 5th South, Rexburg, ID. Our audit period covered January 1, 2013, through December 31, 2015. To accomplish our objective, we performed the following steps: Reviewed applicable HUD requirements. Interviewed staff from HUD, Solace, and HUD’s contract administrator. Obtained and reviewed housing assistance payment data. Reviewed the sampled files. Recalculated the amount of housing assistance supported by the sampled files. Determined the amount of housing assistance requested for tenants after they moved out. Sample Selection We randomly selected a sample of five units to evaluate Solace’s assistance calculations and the accompanying support. Due to turnover in the units, these five units involved 13 different tenants. We also randomly selected five tenants who moved out of Rexburg Plaza during the audit period. We used this sample to determine whether Solace requested assistance for tenants after they moved out. For both of these samples, we randomly selected the items because we wanted our observations to be representative. However, given the amount of time required to review each unit and each move-out, selecting larger statistically valid samples would not have been cost effective. Therefore, we did not project the results of either sample to the universe and are reporting only what we found in our samples. We did not rely on computer-processed data for our conclusions but, rather, relied on supporting documentation in the sampled unit files and from HUD’s contract administrator. We conducted the audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. 8 Internal Controls Internal control is a process adopted by those charged with governance and management, designed to provide reasonable assurance about the achievement of the organization’s mission, goals, and objectives with regard to Effectiveness and efficiency of operations, Reliability of financial reporting, and Compliance with applicable laws and regulations. Internal controls comprise the plans, policies, methods, and procedures used to meet the organization’s mission, goals, and objectives. Internal controls include the processes and procedures for planning, organizing, directing, and controlling program operations as well as the systems for measuring, reporting, and monitoring program performance. Relevant Internal Controls We determined that the following internal controls were relevant to our audit objectives: Policies and procedures for correctly and timely calculating housing assistance payments Policies and procedures to prevent housing assistance from being requested for tenants after they move out. We assessed the relevant controls identified above by evaluating the available policies and procedures. We also reviewed assistance payment data and the files of the sampled units, which demonstrated the effectiveness of the controls. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, the reasonable opportunity to prevent, detect, or correct (1) impairments to effectiveness or efficiency of operations, (2) misstatements in financial or performance information, or (3) violations of laws and regulations on a timely basis. Significant Deficiencies Based on our review, we believe that the following items are significant deficiencies: Solace lacked a process for reviewing its manager’s assistance calculations (finding 1). Solace did not have a process in place to adequately supervise its manager (finding 2). Separate Communication of Minor Deficiencies We reported minor deficiencies to the auditee in a separate management memorandum, dated September 12, 2016. 9 Appendixes Appendix A Schedule of Questioned Costs Recommendation Funds to be put Ineligible 1/ Unsupported 2/ number to better use 3/ 1A $6,804 1B $320 1C $714 2A 584 Totals 904 6,804 714 1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity that the auditor believes are not allowable by law; contract; or Federal, State, or local policies or regulations. 2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program or activity when we cannot determine eligibility at the time of the audit. Unsupported costs require a decision by HUD program officials. This decision, in addition to obtaining supporting documentation, might involve a legal interpretation or clarification of departmental policies and procedures. 3/ Recommendations that funds be put to better use are estimates of amounts that could be used more efficiently if an Office of Inspector General (OIG) recommendation is implemented. These amounts include reductions in outlays, deobligation of funds, withdrawal of interest, costs not incurred by implementing recommended improvements, avoidance of unnecessary expenditures noted in preaward reviews, and any other savings that are specifically identified. In this case, the tenants overpaid rent and if Solace implements our recommendation to refund their money, this would put those funds to a better use. 10 Appendix B Auditee Comments and OIG’s Evaluation Ref to OIG Auditee Comments Evaluation Ronald J. Hosking Regional Inspector General for Audit U.S. Department of Housing and Urban Development Office of Inspector General Office of Audit (Region 10) 909 1st Avenue, Suite 126 Seattle, WA 98104 Dear Mr. Hosking, Comment 1 Thanks for giving me the opportunity to give you a brief back story on the situations at Rexburg Plaza (40 units‐Solace) and Pocatello Portfolio (55 units‐Reflection5). When I purchased the Rexburg Plaza in 2006 I inherited the on site manager of the property at the time. Idaho Housing was familiar with her and gave her high marks. I hired her as my manager and for over the past ten years I have been pleased with her capability and her performance. I believe all of her Management review scores with Idaho Housing have been above average, if not excellent. In 2013 I purchased my second section 8 property in Southeastern Idaho, the 55 unit Pocatello Portfolio. My Rexburg Plaza manager had been asking for more responsibility and more opportunity to grow so I hired a local on site manager and a local maintenance man at the new Pocatello property, which is one hour or so away from Rexburg, and my Rexburg on site manager with a decade of experience, could oversee and manage the staff and property. For the first year or so the property ran smoothly as the woman I hired as the Pocatello manager did a great job, under my Rexburg manager’s supervision and direction. After a year, My Pocatello manager left the Pocatello area for personal reasons. During this transition my maintenance man at Pocatello filled in for the manager and did a great job. I believe in the low income housing program and the benefits it provides. In the same vein, I also believe in giving my employees every opportunity to grow and progress. So, I decided to promote the maintenance man to be the full time manager, with my Rexburg manager continuing to oversee him as a regional manager, and hire a new maintenance man. The mianenance man had been so much more than just a maintenance man. He had helped extensively in the office with paperwork and was the point man with the tenants since he had been on the ground working with them. According to both the former Pocatello manager and the Rexburg manager, the maintenance man was capable and already helping with the office side of the management. I reviewed his resume closely and his background in the US Army and his administrative experience there, and other experience, and he was well 11 Ref to OIG Auditee Comments Evaluation qualified for the position. In retrospect I was loyal to a fault as my new Pocatello manager was overwhelmed in his new position. At the same time, unbeknownst to me, my Rexburg manager had taken a second job at a section 8 senior housing complex about thirty minutes for Rexburg. Despite my training and numerous phone calls and directives and reminders the Pocatello and Rexburg managers were not working together to get the job done as it needed to be. I wanted the properties run smoothly and correctly so I proactively fired the Pocatello manager, reached out to Idaho Housing for their insight and hired immediately on their recommendation the top management company in the city, Pocatello Housing Authority. But it was too late and many of the tenant files were left incomplete. One month after hiring the new property manager I received word of the audit with OIG. An audit that was apparently initiated due to work my Rexburg manager was doing at the elderly section 8 property I was unaware of. Since day one, Pocatello Housing Authority has done an excellent job of stepping in, completing the appropriate paperwork and keeping detailed files. I look forward to a long and successful partnership with them. My Rexburg manager has benefitted from not having to oversee employees in Pocatello and is doing a good job just managing Rexburg Plaza for me. I feel both properties are in great condition now and things are running very, very well. That leaves us with a window of time where paperwork was not done correctly, or not at all and things I was responsible for overseeing were missed by my employees. At the end of day, the files were left incomplete and important paperwork undone. As a result, I cannot disagree with OIG’s findings about missing paperwork pertaining to occupancy, re‐certifications, and other eligibility requirements to support proof of the tenants’ eligibility for low income assistance and the subsequent payment of that Assistance received by Solace and Reflection5. As owner, I take full responsibility for the incompetence of these employees as I was the one that gave them the opportunity and responsibility. However, despite the missing and incorrect paperwork, I can attest that I Comment 2 am 100% confident that there were tenants living in the units where housing assistance was being paid to Solace and Reflection5. We were always 100% occupied. I am also very confident that these tenants were eligible for housing assistance payments. Both properties have always maintained a waiting list of tenants equal to a 1‐2 year wait period. As vacant units opened up, I am certain the Pocatello manager and the Rexburg manager were putting new tenants in from the wait list. Because of that, and because of my personal physical inspections to these properties during the time in question, it is my belief that not only were they filled but they were filled with tenants that qualified and deserved housing assistance. I believe many of the tenants in question had been long time tenants where the recertification and other paperwork was simply just not completed on their behalf. Per the OIG inspection, the auditor found that ALL tenants occupying the property during the review, where the paperwork was completed, were shown to be HAP assistance eligible. 12 Ref to OIG Auditee Comments Evaluation In the case of Rexburg Plaza (Solace) some honest occasional calculation errors were made dealing with the exact move in or move out date, or similar oversights. In the case of Pocatello (Reflection5) there was a period where the tenant files were left incomplete and many important and required aspects of the housing assistance requirements were simply not executed correctly. I believe this was an unfortunate lesson of promoting the wrong employee from within and not overseeing his development and training and performance as closely as I should have and as closely as I was lead to believe my Rexburg manager was. I want to assure you that the moment I realized these errors I made immediate changes. I can also promise you no fraud or other or theft of services/housing payments for ineligible tenants was ever conceived or committed on my part. I can tell you due to these events and audits we are more dedicated than ever to running these properties as perfectly as possible going forward and eliminating any errors whatsoever. I apologize for the oversights on my part and on the part of my staff. We have made internal changes to process and procedures to improve our process and proactively hired outside management companies for the properties to assure this never happens again. I humbly request that HUD give us the chance to prove that without inflicting such a large monetary penalty. These properties are 45 years old and need and deserve capital improvements for the tenants’ benefit. I am not sure how we could cope with such a large financial set back. I am sincerely sorry and embarrassed for this situation. I have been an owner of section 8 housing for over a decade. I believe in the program and I believe in providing low income housing and I want to be involved long term in HUD’s efforts to provide housing for those who stand in need. Sincerely, Greg Barratt Managing member of Solace, LLC and Reflecion5, LLC 13 OIG Evaluation of Auditee Comments Comment 1 Mr. Barratt provided these comments in response to this report as well as to our report 2016-SE-1004 on Reflection5, the owner entity of his Pocatello, ID properties. He generally agreed with our findings. Comment 2 We did not find any eligibility issues with the 13 tenants whose files we reviewed for the calculation of tenant assistance and accompanying support. However, we did not review the eligibility of all of the Solace and Reflection5 tenants as Mr. Barratt states here. 14 Appendix C Incorrect Assistance Amounts Noted in Tenant Files Unsupported Overcharged Overcharged rent assistance assistance Unit Tenant due to calculation due to unperformed due to calculation errors income verifications errors #201 Tenant 1 $228 #202 Tenant 2 $6,804 #307 Tenant 3 $201 36 #307 Tenant 4 450 #506 Tenant 5 45 #506 Tenant 6 35 #506 Tenant 7 39 Total 6,804 320 714 15 Appendix D Criteria HUD Handbook 4350.3 – Occupancy Requirements of Subsidized Multifamily Housing Programs 5-12 – Verification Requirements B. Timeframe for Conducting Verifications Owners conduct verifications at the following three times. 1. Owners must verify income, assets, expenses, and deductions and all eligibility requirements prior to move-in. 2. Owners must verify each family’s income, assets, expenses, and deductions as part of the annual recertification process. Refer to Chapter 7, Section 1 for information on annual recertifications. 3. Owners must verify changes in income, allowances, or family characteristics reported between annual recertifications. Refer to Chapter 7, Section 2 for information on interim recertifications. 5-17 – Effective Term of Verifications Signed verification and consent forms must be used within a reasonable time after the applicant or tenant has signed if the tenant’s signature is to represent a valid and current authorization by the family. Therefore, HUD has set specific limits on the duration of verification consents. In addition, verified information must be used in a timely manner since family circumstances are subject to change. HUD places several other limits on the information that may be requested and when and how it may be used. B. Effective Term of Verifications 1. Verifications are valid for 120 days from the date of receipt by the owner. 2. If verifications are more than 120 days old, the owner must obtain new verifications. 3. Time limits do not apply to information that does not need to be reverified, such as: a. Age; b. Disability status; c. Family membership; or d. Citizenship status. 4. Time limits also do not apply to the verification of social security numbers; however, at each recertification any family member who has previously reported having never received a social security number, must be asked: a. To supply verification of a social security number if one has been received; or b. To certify, again, that he/she has never received a social security number. 7-4 – Key Requirements A. To ensure that assisted tenants pay rents commensurate with their ability to pay, HUD requires the following: 16 1. Owners must conduct a recertification of family income and composition at least annually. Owners must then recompute the tenants’ rents and assistance payments, if applicable, based on the information gathered. 7-5 – Timing of Annual Recertifications A. Key Requirement Annual recertifications must be completed by the tenant’s recertification anniversary date. B. Determining Recertification Anniversary Dates 1. The recertification anniversary date is the first day of the month in which the tenant moved into the property. A tenant moving in with no assistance payment, such as a Section 236 or a Section 221(d)(3) BMIR [Below Market Interest Rate] tenant, who later begins receiving assistance payments, will have his or her annual recertification date changed to the first day of the month that the tenant began receiving assistance from HUD. 8-6 – Procedures for Terminating or Reinstating Assistance To avoid the potential for discrimination, it is important for owners to ensure that the requirements and procedures described below are applied consistently to all tenants. B. Reinstating Assistance An owner may reinstate a tenant’s terminated assistance if: 1. The original termination of assistance was due to: a. A tenant’s failure to recertify, or b. A tenant’s increased ability to pay; 2. The original termination of assistance was not due to fraud; 3. The tenant is eligible for assistance (based on the income and rent calculation, the tenant would pay less than market rent); 4. The tenant submits the required information; and 5. Assistance is available for the unit. Appendix 14 – Fact Sheet – How Rent is Determined Owner/Management Agent Responsibilities: Obtain accurate income information Verify resident income Ensure residents receive the exclusions and deductions to which they are entitled Accurately calculate Tenant Rent Provide tenants a copy of lease agreement and income and rent determinations Recalculate rent when changes in family composition are reported Recalculate rent when resident income decreases Recalculate rent when resident income increases by $200 or more per month Recalculate rent every 90 days when resident claims minimum rent hardship exemption Provide information on OA [Owner-Agent] policies upon request Notify residents of any changes in requirements or practices for reporting income or determining rent 17 Monthly Activity Transmission User Guide 7-12 Assistance Payments E. Payments for Partial-Month Occupancies Owners are entitled to an assistance payment only for the actual number of days during the month that the tenant occupied the unit. If the move-out date is unknown because the tenant failed to notify the owner prior to moving out, the move-out date is the day the vacancy is discovered. 18
Solace LLC, Rexburg, ID, Did Not Always Correctly Compute Tenant Annual Income, Conduct Timely Tenant Income Verifications, or Request the Appropriate Assistance When Tenants Moved Out
Published by the Department of Housing and Urban Development, Office of Inspector General on 2016-09-12.
Below is a raw (and likely hideous) rendition of the original report. (PDF)