diff --git a/level_zero/core/source/driver/driver_handle_imp.cpp b/level_zero/core/source/driver/driver_handle_imp.cpp
index 2aa41097c2..0581556634 100644
--- a/level_zero/core/source/driver/driver_handle_imp.cpp
+++ b/level_zero/core/source/driver/driver_handle_imp.cpp
@@ -417,7 +417,7 @@ void DriverHandleImp::initDeviceUsmAllocPool(NEO::Device &device, bool multiDevi
         poolParams.poolSize = NEO::debugManager.flags.EnableDeviceUsmAllocationPool.get() * MemoryConstants::megaByte;
     }
 
-    bool trackResidency = false;
+    bool trackResidency = true;
     if (NEO::debugManager.flags.EnableUsmPoolResidencyTracking.get() != -1) {
         trackResidency = NEO::debugManager.flags.EnableUsmPoolResidencyTracking.get() != 0;
     }
diff --git a/level_zero/core/test/unit_tests/sources/memory/test_memory_pooling.cpp b/level_zero/core/test/unit_tests/sources/memory/test_memory_pooling.cpp
index 83d7ea2a75..1e555da93a 100644
--- a/level_zero/core/test/unit_tests/sources/memory/test_memory_pooling.cpp
+++ b/level_zero/core/test/unit_tests/sources/memory/test_memory_pooling.cpp
@@ -673,8 +673,6 @@ TEST_F(AllocUsmDeviceEnabledSinglePoolMemoryTest, givenMultiplePooledAllocations
 }
 
 TEST_F(AllocUsmDeviceEnabledSinglePoolMemoryTest, givenPooledAllocationWhenCallingResidencyOperationsThenSkipIfAllowed) {
-    DebugManagerStateRestore restorer;
-    NEO::debugManager.flags.EnableUsmPoolResidencyTracking.set(1);
     auto mockDeviceMemAllocPool = reinterpret_cast<MockUsmMemAllocPool *>(l0Devices[0]->getNEODevice()->getUsmMemAllocPool());
     ASSERT_NE(nullptr, mockDeviceMemAllocPool);
     EXPECT_TRUE(mockDeviceMemAllocPool->isInitialized());
@@ -736,8 +734,47 @@ TEST_F(AllocUsmDeviceEnabledSinglePoolMemoryTest, givenPooledAllocationWhenCalli
     EXPECT_EQ(ZE_RESULT_SUCCESS, context->freeMem(nonPooledPtr));
 }
 
+TEST_F(AllocUsmDeviceEnabledSinglePoolMemoryTest, givenDebugFlagWhenInitializingPoolThenEnableResidencyTrackingCorrectly) {
+    auto neoDevice = l0Devices[0]->getNEODevice();
+    // default
+    EXPECT_TRUE(neoDevice->getUsmMemAllocPool()->isTrackingResidency());
+    neoDevice->cleanupUsmAllocationPool();
+    neoDevice->resetUsmAllocationPool(nullptr);
+
+    DebugManagerStateRestore restorer;
+    NEO::debugManager.flags.EnableUsmPoolResidencyTracking.set(0);
+    driverHandle->initDeviceUsmAllocPool(*neoDevice, numRootDevices > 1);
+    EXPECT_FALSE(neoDevice->getUsmMemAllocPool()->isTrackingResidency());
+    neoDevice->cleanupUsmAllocationPool();
+    neoDevice->resetUsmAllocationPool(nullptr);
+
+    NEO::debugManager.flags.EnableUsmPoolResidencyTracking.set(1);
+    driverHandle->initDeviceUsmAllocPool(*neoDevice, numRootDevices > 1);
+    EXPECT_TRUE(neoDevice->getUsmMemAllocPool()->isTrackingResidency());
+}
+
 using AllocUsmDeviceEnabledMemoryNewVersionTest = AllocUsmPoolMemoryTest<-1, 1, -1>;
 
+TEST_F(AllocUsmDeviceEnabledMemoryNewVersionTest, givenDebugFlagWhenInitializingPoolManagerThenEnableResidencyTrackingCorrectly) {
+    auto neoDevice = l0Devices[0]->getNEODevice();
+
+    // default
+    EXPECT_TRUE(reinterpret_cast<MockUsmMemAllocPoolsManager *>(neoDevice->getUsmMemAllocPoolsManager())->trackResidency);
+    neoDevice->cleanupUsmAllocationPool();
+    neoDevice->resetUsmAllocationPoolManager(nullptr);
+
+    DebugManagerStateRestore restorer;
+    NEO::debugManager.flags.EnableUsmPoolResidencyTracking.set(0);
+    driverHandle->initDeviceUsmAllocPool(*neoDevice, numRootDevices > 1);
+    EXPECT_FALSE(reinterpret_cast<MockUsmMemAllocPoolsManager *>(neoDevice->getUsmMemAllocPoolsManager())->trackResidency);
+    neoDevice->cleanupUsmAllocationPool();
+    neoDevice->resetUsmAllocationPoolManager(nullptr);
+
+    NEO::debugManager.flags.EnableUsmPoolResidencyTracking.set(1);
+    driverHandle->initDeviceUsmAllocPool(*neoDevice, numRootDevices > 1);
+    EXPECT_TRUE(reinterpret_cast<MockUsmMemAllocPoolsManager *>(neoDevice->getUsmMemAllocPoolsManager())->trackResidency);
+}
+
 TEST_F(AllocUsmDeviceEnabledMemoryNewVersionTest, givenContextWhenAllocatingAndFreeingDeviceUsmThenPoolingIsUsed) {
     executionEnvironment->rootDeviceEnvironments[0]->osInterface.reset(new NEO::OSInterface());
     executionEnvironment->rootDeviceEnvironments[0]->osInterface->setDriverModel(std::make_unique<NEO::MockDriverModelDRM>());