VICTORY OAKS, INC.Non-Profit

Criteria - Eligibility Management is responsible for determining tenant eligibility and maintaining lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs. In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws. Condition In connection with our lease file review we noted the following deficiencies: Two of six tenants tested did not utilize the Enterprise Income Verification (EIV) system timely. In connection with the procedures applied to a sample of one tenant that moved out of the Project during the year, we noted one instance where management failed to refund the tenant security deposit within 30 days after the move-out date. Cause The Project failed to follow the policies and procedures which have been established for proper tenant file maintenance and determining tenant eligibility in accordance with HUD guidelines. Management failed to follow procedures regarding timely refunding of tenant security deposits in accordance with HUD guidelines which resulted in refunds to occur in greater than 30 days after move-out. Effect or Potential Effect Noncompliance with HUD guidelines could result in units being rented to ineligible tenants or errors in the rent subsidies paid by HUD. Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits or to provide the tenant with a list of charges. Context A sample of seven tenant files from a population of 52 were selected. We identified exceptions in three of the seven files tested. The sample was not a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Questioned Costs None Recommendation 2023-001a - Management should establish procedures and monitor compliance with those procedures to ensure that the determination of tenant eligibility and the maintenance of lease files are in accordance with guidelines specified by HUD. 2023-001b - Management should change its policies and procedures related to refunding of tenant security deposits to comply with the 30-day timeline required by HUD regulations. Auditor Noncompliance Code: R - Section 8 program administration Finding Resolution Status: In-Process Views of Responsible Officials The policy for the return of security deposits received on site is consistent throughout the company. This is taught to incoming staff members to make sure that the proper timeline is adhered to during the move out process each month. The policy is specific in saying that the paperwork and letter notifying the tenant(s) status of their security deposit whether it is a refund, or they owe additional funds upon vacating from their apartment is sent by the manager within 7-10 business days The security deposit refund is also checked by our Regional by the 15th of each month and our in-house Accounting Department to make sure that all security deposits are completed and sent out prior to 30 days from the day that the resident moves out. Going into 2024, this training is scheduled throughout the year and always available on our HAU Training Programs accessible to all employees. The training is for new hires and existing employees to reiterate the process to make sure all employees are aware of the sensitive timeline associated with the return of the security deposit for our tenants.