How to Document Resolutions of Discrepancies Found While Verifying Income
When you verify a household’s income with employers or other verification sources, you may get information that contradicts what household members told you during the household’s certification or annual recertification. For instance, a household member may tell you that he gets $50 per month in disability payments. But when you verify those payments with the government, you may learn that the member actually gets $65 per month.
When discrepancies arise, you must resolve them by talking with the household member and the verification source to determine the correct figure to use. But this isn’t the end of the story. Those discrepancies may come back to haunt you later if a question arises during a state housing agency audit.
To make audits go smoothly and to protect yourself against liability, it’s important to take an extra step. After you resolve a discrepancy, write a memo explaining the discrepancy and how you resolved it and place it in the household’s file. We’ve put together a Model Memo: Explain Discrepancies to Make Audits Go Smoothly, which you can use as a guide when writing your own memos for this purpose.
How Memo Helps
If your state housing agency questions the information on a form or asks why certain information was changed, you need to be prepared with the answer. If you can’t explain to the agency how you handled discrepancies, the agency might question the entire certification or recertification and whether you did it accurately.
Remembering every discrepancy for every household and how it was resolved is an enormous burden. Documenting the information in memos saved in the household files removes that burden. Plus, the staff member who resolves a discrepancy may no longer be with your company when your state housing agency audits your site and raises questions. Keep in mind that state housing agencies audit sites throughout the sites’ 15-year compliance period. In an audit, you should expect that your agency will want to review your files dating back to year one.
When to Use Memo
Write a memo to a household’s file each time you resolve a discrepancy during that household’s initial certification or an annual recertification. Keep a copy of your memo in the appropriate household’s file when you finish. It’s best to attach your memo to the document it most concerns. For instance, if the discrepancy involved the amount of income listed on a household member’s military pay verification form, attach the memo to that form.
What Memo Should Say
Your memo, like our Model Memo, should include the following:
Household name. Identify the household by writing the name of the household and its unit number at the top of the memo.
Building number. Write the building identification number (BIN) to identify the building in which the household’s unit is located. Note that each building at your tax credit site must have its own BIN.
Date and staff member name. When you complete the memo, put the current date on it. This can show that you wrote the memo promptly after you resolved the discrepancy. Make sure your name appears on the memo, in case anyone looking at the memo has questions or needs to know who wrote it.
Description of discrepancy. Indicate what information or which figures were at issue. For instance, say that the discrepancy concerned the amount of income a household member earns from her weekend job. And give the conflicting figures you get from households and their verification sources.
Explanation of how you resolved discrepancy. Say what you did to resolve the discrepancy. For instance, say that when you showed the household member the verification you received, the household member realized that she was mistaken and told you that the verification source was correct.