INTERFAITH HOUSING ALLIANCE, INC.Non-Profit

2020-001 Eligibility Recordkeeping Significant Deficiency Repeat from 2019 Criteria United States Department of Agriculture Rural Development (USDA) requires that tenants in housing projects financed by USDA loans be required to certify their income and assets upon initial project entry and at least annually after that. The certifications are the basis for the net tenant contribution to monthly rent, while the remainder of rent is paid in the form of rental assistance from USDA to Interfaith Housing Alliance, Inc. Condition Evidence of annual recertification for 1 tenant in a 5 tenant sample for the Union Village project in Westminster, Maryland was not able to be located. Cause Interfaith Housing?s current management and staff cannot locate the recertification paperwork filed for this tenant. At the time the recertification was due (February 1, 2020), Interfaith Housing was leading up to a sale of the project to a developer. The settlement took place on April 1, 2020. Effect The support for the amount of the net tenant contribution cannot be located. Therefore, the amount of the net tenant contribution and the amount of rental assistance for the tenant in question cannot be substantiated during the time period from February 1, 2020 to April 1, 2020. Recommendation There is no recommendation as Interfaith Housing sold the property to a developer on April 1, 2020 and is no longer responsible for collecting and certifying tenant income for this property. The loan secured by the property was paid off when the property was sold. Views of responsible officials and planned corrective action There is no corrective action plan as Interfaith Housing sold the property to a developer on April 1, 2020 and is no longer responsible for collecting and certifying tenant income for this property. The loan secured by the property was paid off when the property was sold.

Criteria - United States Department of Agriculture Rural Development (USDA) requires that tenants in housing projects financed by USDA loans be required to certify their income and assets upon initial project entry and at least annually after that. The certifications are the basis for the net tenant contribution to monthly rent, while the remainder of rent is paid in the form of rental assistance from USDA to Interfaith Housing Alliance, Inc. Condition - Evidence of annual recertifications for 3 tenants in a 10 tenant sample for the Union Village project in Westminster, Maryland were not able to be located. While the monthly project worksheets submitted to USDA indicated there was a change in the net tenant contribution during the year, which would have resulted from a recertification event, a physical copy of the recertification and the supporting income and asset documents collected from the tenant could not be located. Cause - During the year, there was turnover in the on-site project manager position, and Interfaith Housing?s current management and staff cannot locate the recertification paperwork filed by this project manager. Effect - There is no evidence of the amount of the net tenant contribution for the tenants not able to be located. Therefore, there is no evidence that the net tenant contribution and the amount of rental assistance for the tenants in question is accurate during the time period for which the recertifications could not be located. Recommendation - Interfaith Housing should implement procedures to require the scanning of recertification documents to a secure file housed on their network. In addition, we recommend that the asset manager conduct a quarterly internal review of a sample of recertifications to ensure that on-site property managers are complying with this requirement and are accurately completing recertification paperwork. Views of responsible officials and planned corrective action - Interfaith Housing concurs with this recommendation. We will require the electronic scanning of initial certifications, recertifications, and the documents collected from tenants to support the certifications. This should mitigate the risk that physical paperwork cannot be located upon changes in on-site property management. In addition, we will implement a procedure for the asset manager to conduct a periodic review of a sample of tenant certifications to verify their existence and accuracy.