Over the past three months, I’ve done several file audits at the request of Owners/Agents. This is the kind of consulting work NCHM is doing more of these days. And, believe it or not, it is the kind of work I personally enjoy. One of the reasons I enjoy it is that it gives me an opportunity to revisit the practical side of day-to-day compliance with HUD guidelines.
For a great many years, I’ve not been shy about saying that tenant files are the lifeblood of a property, insofar as those files should support, in a documented way, the amount of both tenant rent and housing assistance payments. I’ve also said, in this connection, that your files “must tell a complete story.”
I stand by both those statements. But, today, I want to focus on a different point for your consideration: Tenant files represent the end product of the leasing and occupancy management component of our business. What I’ve not said until now, but should have, is that there is a connection between the compliance “product” (the tenant files) and the process by which the files are documented and managed.
This is the “big picture.” When I review files, and discover that there are none of the recertification notices referenced in Chapter 7 of HUD Handbook 4350.3, Rev. 1, it tells me there is some kind of disconnect, that the process at the property is flawed. This isn’t the same thing as errors in TTP and assistance payments, since even in the worst files I’ve found documentation supporting how the owner/agent calculated those numbers.
As with many things, however, a focus on one or two things like the TTP and assistance payments (vitally important as they are) can result in overlooking things that are also critically important. Recertification notices: Initial; First Reminder notice; Second Reminder notice; Third Reminder notice are often discovered to be a weak area in the file audit. Checking student status at a Section 8 property at the time of recertification would be another. Late recertifications are another. Poor follow up on EIV Income Discrepancy Reports would be another.
Many owner/agents will tell you about their recertification processes, but they’ve never committed it to writing. And sometimes the process has no oversight or supervision. This can have the most serious repercussions. The HUD Handbook 4350.3, Chapter 7, provides guideposts for recertification compliances. It doesn’t tell you that you need to have some form of tracking mechanism, but it’s a good idea. Creating the tools you need to manage a process is as important as any other compliance element. I’ll be writing more on this in the coming months.