UDA DEMPSEY LLC

Criteria: Per the regulatory agreement and HUD policies, move-out inspections must be conducted and documented when a unit is vacated. This inspection serves as the baseline for determination of damages and consideration of return of security deposits. Condition: The Organization was unable to provide documentation to support move-out inspections were conducted. Specifically move-out inspection forms were not available for testing. Context: During our testing of a sample of 37 tenant files, we noted the Organization was unable to provide the required move-out inspection forms for the 13 move-out files selected. Management attested the move-out inspections were conducted, but may have been destroyed in a flood. Documentation via the electronic management system was available denoting the units were vacated, but was not substantive enough to denote the move-out inspections were conducted. Cause: Management oversight. Effect: Failure to properly document move-out inspections provides a gap in documentation to substantiate the rationale for a damage assessment or return of a security deposit. Recommendation: We recommend that the Organization establish random reviews of tenant files for all required documentation to identify any deficiencies. This is critical, especially after disaster events which may have led to a loss of documentation. Management should also consider electronic backup documentation mechanisms that meet HUD requirements. Management can then ensure the tenant files are complete and meet requirements. Views of Responsible Official and Planned Corrective Action: We concur. We are in the process of remediating the files in question and implementing appropriate processes to ensure compliance going forward.