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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Solace LLC’s Section 8 housing assistance payments program because of the results of our previous audit of another multifamily property.  The person responsible for housing assistance program issues at the other property was also Solace’s manager.  Our objectives were to determine whether Solace correctly computed tenant annual income, conducted timely tenant income verifications, and requested assistance for tenants after they moved out.

We found that Solace did not always correctly compute tenant annual income or conduct timely tenant income verifications.  As a result, it overcharged the U.S. Department of Housing and Urban Development (HUD) more than $7,100 for housing assistance and overcharged three tenants more than $700.  In addition, Solace requested housing assistance for tenants after they had moved out and overcharged HUD almost $600 for these tenants.

We recommend that the Director of the San Francisco Office of Multifamily Housing Programs require Solace to (1) provide support for $6,804 in overcharged housing assistance that was based on unverified income and reimburse HUD any amount that remains unsupported; (2) reimburse HUD $320 in overcharged assistance and $584 that it charged for tenants who had moved out; (3) reimburse three tenants who overpaid rent by $714; (4) conduct periodic reviews of tenant files to ensure that its manager correctly calculates housing assistance payments, adequately documents the completion of required annual recertifications, and does not request assistance from HUD for tenants after they move out.  We also recommend that the Director provide technical assistance to ensure that Solace’s manager understands the requirements in the Monthly Activity Transmission Guide, paragraph 7-12(E), and review Solace’s tenant files 1 year later to determine whether this requirement is understood and being followed.