Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan
Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan
Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan
Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan
Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan
Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan
Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.