Statement of Condition: During the review of low rent tenant files, it was noted there was insufficient documentation of a second party review on all files, one tenant file could not be located, 2 out of 10 files selected for testing lacked the signature of the head of household, 2 out of 10 files selected for testing lacked sufficient support for a zero income individual, 2 out of 10 files selected for testing did not report state amounts for SSI. Criteria: 2 CFR Part 200 Subpart F requires the Commission to determine income eligibility and calculate the tenant?s rent payment using the documentation from third party verification. 2 CFR Part 200 Subpart F requires the Commission to have effective internal controls and accountability must be maintained for all funds. Perspective Information: Asset accounts, sources of income, and medical expenses are required to be verified with the third party annually. Additionally, the Commission did not have adequate policies and procedures in place for accountability of its tenant files. Questioned Costs: Projection of net errors identified in sample: $2,043. Effect: Tenant annual certifications and interim re-examinations may be calculated incorrectly. Cause: Ineffective review process over the certification of tenant files and/or lack of knowledge of HUD regulation regarding rent certifications. Recommendation: The Commission should consider reviewing its current policy regarding rent certifications. The Commission should ensure all persons involved in the certification process are properly trained and understand regulations in order to accurately identify errors. The Commission should adopt policies and procedures that would require a second person to be involved in the certification process to ensure the accountability of tenant files. The reviewer should sign and date the verification form, evidencing the control is being performed. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will ensure all staff members involved in the annual recertification and interim examinations are properly trained with respect to the rules and regulations pertaining to this process. Management will also implement stronger internal controls and policies regarding rent certifications.
Statement of Condition: During the review of tenant files it was noted there was insufficient documentation of a second party review on all files, 2 out of 25 files selected for testing did not report State of Michigan amounts for SSI, 2 out of 25 files selected for testing reported family contributions that were not taken into consideration when HAP was calculated, 1 out of 25 files selected for testing showed employment amounts were taken from EIV rather than from third party support resulting in the wrong employer and wages being reported, and it was noted there was a lack sufficient support for zero income individuals. Criteria: E. ELIGIBILITY: 2 CFR Part 200 Subpart F requires a PHA to have an eligible operating fund expenditure that is due and payable within 3 days of disbursing funds from the capital fund. Perspective Information: The Commission did not have effective internal controls over eligibility for the federal program. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the eligibility section above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure all federal compliances are followed pertaining to eligibility. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will ensure all staff members involved in the annual recertification and interim examinations are properly trained with respect to the rules and regulations pertaining to this process. Management will also implement stronger internal controls and policies regarding rent certifications.
Finding 2022-004 Statement of Condition: During the review of tenant files it was noted 8 out of 11 new move-ins did not have support of being selected from the waiting list prior to entry into the program. Upon discussion with client it was noted the Commission does not routinely maintain such support. Criteria: N. SPECIAL TESTS AND PROVISIONS ITEM 1. SELECTION FROM THE WAITING LIST: 24 CFR Section 5.410 requires a PHA to ensure all families admitted to the program must be selected from the waiting list. Perspective Information: The Commission did not have effective internal controls over selection from the waiting list for the federal program. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the special tests and provisions, selection from the waiting list section above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure all federal compliances are followed pertaining to selection from the waiting list. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will implement stronger internal controls over ensuring support of selection from the waiting list is maintained in the tenant files.
Finding 2022-005 Statement of Condition: During the review of tenant files it was noted 1 out of 25 annual inspections could not be located, noted 2 out of 25 annual inspections had failed and were not reinspected within the appropriate timeframe, including one that was considered life threatening. Criteria: N. SPECIAL TESTS AND PROVISIONS ITEM 4. HOUSING QUALITY INSPECTIONS AND ITEM 5. HQS ENFORCEMENT: 24 CFR Section 982.158(d) requires a PHA to perform a quality inspection yearly and reinspect any failed inspections with 24 hours for life threatening items or 30 days for non-life threatening items. Perspective Information: The Commission did not have effective internal controls over HQS inspections. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the special tests and provisions, housing quality inspections and HQS enforcement sections above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure all federal compliances are followed pertaining to housing quality inspections and HQS enforcement. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will implement stronger internal controls over housing quality inspections.
Finding 2022-006 Statement of Condition: It was noted the Commission has not updated its utility allowance schedule since 2013. Criteria: N. SPECIAL TESTS AND PROVISIONS ITEM 3. UTILITY ALLOWANCE SCHEDULE: 24 CFR Section 982.517 requires a PHA to maintain an up to date utility allowance schedule. Perspective Information: The Commission did not have effective internal controls over the utility allowance schedule. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the special tests and provisions, utility allowance schedule section above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure the utility allowance schedule is updated yearly. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will implement stronger internal controls over the utility allowance schedule.
Statement of Condition: During the review of low rent tenant files, it was noted there was insufficient documentation of a second party review on all files, one tenant file could not be located, 2 out of 10 files selected for testing lacked the signature of the head of household, 2 out of 10 files selected for testing lacked sufficient support for a zero income individual, 2 out of 10 files selected for testing did not report state amounts for SSI. Criteria: 2 CFR Part 200 Subpart F requires the Commission to determine income eligibility and calculate the tenant?s rent payment using the documentation from third party verification. 2 CFR Part 200 Subpart F requires the Commission to have effective internal controls and accountability must be maintained for all funds. Perspective Information: Asset accounts, sources of income, and medical expenses are required to be verified with the third party annually. Additionally, the Commission did not have adequate policies and procedures in place for accountability of its tenant files. Questioned Costs: Projection of net errors identified in sample: $2,043. Effect: Tenant annual certifications and interim re-examinations may be calculated incorrectly. Cause: Ineffective review process over the certification of tenant files and/or lack of knowledge of HUD regulation regarding rent certifications. Recommendation: The Commission should consider reviewing its current policy regarding rent certifications. The Commission should ensure all persons involved in the certification process are properly trained and understand regulations in order to accurately identify errors. The Commission should adopt policies and procedures that would require a second person to be involved in the certification process to ensure the accountability of tenant files. The reviewer should sign and date the verification form, evidencing the control is being performed. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will ensure all staff members involved in the annual recertification and interim examinations are properly trained with respect to the rules and regulations pertaining to this process. Management will also implement stronger internal controls and policies regarding rent certifications.
Statement of Condition: During the review of tenant files it was noted there was insufficient documentation of a second party review on all files, 2 out of 25 files selected for testing did not report State of Michigan amounts for SSI, 2 out of 25 files selected for testing reported family contributions that were not taken into consideration when HAP was calculated, 1 out of 25 files selected for testing showed employment amounts were taken from EIV rather than from third party support resulting in the wrong employer and wages being reported, and it was noted there was a lack sufficient support for zero income individuals. Criteria: E. ELIGIBILITY: 2 CFR Part 200 Subpart F requires a PHA to have an eligible operating fund expenditure that is due and payable within 3 days of disbursing funds from the capital fund. Perspective Information: The Commission did not have effective internal controls over eligibility for the federal program. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the eligibility section above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure all federal compliances are followed pertaining to eligibility. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will ensure all staff members involved in the annual recertification and interim examinations are properly trained with respect to the rules and regulations pertaining to this process. Management will also implement stronger internal controls and policies regarding rent certifications.
Finding 2022-004 Statement of Condition: During the review of tenant files it was noted 8 out of 11 new move-ins did not have support of being selected from the waiting list prior to entry into the program. Upon discussion with client it was noted the Commission does not routinely maintain such support. Criteria: N. SPECIAL TESTS AND PROVISIONS ITEM 1. SELECTION FROM THE WAITING LIST: 24 CFR Section 5.410 requires a PHA to ensure all families admitted to the program must be selected from the waiting list. Perspective Information: The Commission did not have effective internal controls over selection from the waiting list for the federal program. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the special tests and provisions, selection from the waiting list section above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure all federal compliances are followed pertaining to selection from the waiting list. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will implement stronger internal controls over ensuring support of selection from the waiting list is maintained in the tenant files.
Finding 2022-005 Statement of Condition: During the review of tenant files it was noted 1 out of 25 annual inspections could not be located, noted 2 out of 25 annual inspections had failed and were not reinspected within the appropriate timeframe, including one that was considered life threatening. Criteria: N. SPECIAL TESTS AND PROVISIONS ITEM 4. HOUSING QUALITY INSPECTIONS AND ITEM 5. HQS ENFORCEMENT: 24 CFR Section 982.158(d) requires a PHA to perform a quality inspection yearly and reinspect any failed inspections with 24 hours for life threatening items or 30 days for non-life threatening items. Perspective Information: The Commission did not have effective internal controls over HQS inspections. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the special tests and provisions, housing quality inspections and HQS enforcement sections above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure all federal compliances are followed pertaining to housing quality inspections and HQS enforcement. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will implement stronger internal controls over housing quality inspections.
Finding 2022-006 Statement of Condition: It was noted the Commission has not updated its utility allowance schedule since 2013. Criteria: N. SPECIAL TESTS AND PROVISIONS ITEM 3. UTILITY ALLOWANCE SCHEDULE: 24 CFR Section 982.517 requires a PHA to maintain an up to date utility allowance schedule. Perspective Information: The Commission did not have effective internal controls over the utility allowance schedule. Questioned Costs: Unknown. Effect: The Commission is not in compliance with the requirements as outlined in the special tests and provisions, utility allowance schedule section above. Cause: Lack of controls over grant requirements. Recommendation: The Commission should implement policies and procedures to ensure the utility allowance schedule is updated yearly. Management?s Response: New management has taken over the Commission subsequent to the period under audit and will implement stronger internal controls over the utility allowance schedule.