The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Reflection5 LLC’s Section 8 housing assistance payments program because of the results of a previous audit of another multifamily property. The person responsible for housing assistance program issues at the other property was also involved with the housing assistance program at Reflection5. Our objectives were to determine whether Reflection5 maintained documentation supporting its assistance calculations and performed the required tenant recertifications.
We found that Reflection5 did not always retain tenant files for tenants who moved out, document its decision to grant hardship exemptions, conduct required recertifications, or obtain and review third-party verifications of income. As a result, it overcharged HUD almost $169,000.
We recommend that the Director of the San Francisco Office of Multifamily Housing Programs require Reflection5 to (1) provide support for the almost $133,000 in assistance that was based on missing tenant files and reimburse HUD for the amount that remains unsupported; (2) provide support for the almost $250 in assistance that was based on unsupported hardship exemptions and reimburse HUD for the amount that remains unsupported; (3) provide support for the almost $36,000 in assistance that was based on unperformed or missing annual recertifications and reimburse HUD for the amount that remains unsupported; and (4) conduct periodic reviews of tenant files to ensure that its manager or management agent maintains the tenant files, completes the required annual recertifications, and adequately supports hardship exemptions in accordance with HUD requirements.