Audit 27650

Findings and Questioned Costs for Federal Awards 2022-001 ? Eligibility U.S. Department of Housing and Urban Development 14.850 ? Public and Indian Housing Condition: During the audit, it was noted that out of 15 tenant files reviewed for the Public and Indian Housing program, 5 files were missing a signed form HUD-9886, 10 files did not have third-party income verification complete, 3 files did not have a signed lease or lease addendum signed, and 3 files had a lease or lease addendum signed four to seven months after the new rent took effect. Circumstances surrounding the recertification process have been affected by the COVID-19 pandemic and the resulting rent moratorium. Existing controls were designed with the expectation that if the participant did not comply with their end of the process, they would be removed from the program, and the Authority would still be compliant. Since the rent moratorium removed the Authority?s ability to evict tenants, the existing controls, although functioning, were not sufficient to ensure the Authority complied with the eligibility requirement to account for this unique situation. Criteria: As a condition of admission or continued occupancy, PHAs must require the tenant and applicable family members to provide necessary information and releases for the PHA to verify income eligibility, obtain and document the family file third-party verification of reported family income, and reexamine family income at least once every 12 months and adjust the tenant rent as necessary. Cause: The Authority did not adjust their controls over eligibility to ensure compliance requirements were met. Effect: Potential loss of funding due to noncompliance. Questioned Costs: None identified. Perspective: Based on the number of tenant files with findings, we believe this is a systemic event. Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Authority establishes processes and controls which ensure eligibility requirements are met. Auditee?s Response and Corrective Action Plan: See corrective action plan.

Findings and Questioned Costs for Federal Awards 2022-001 ? Eligibility U.S. Department of Housing and Urban Development 14.850 ? Public and Indian Housing Condition: During the audit, it was noted that out of 15 tenant files reviewed for the Public and Indian Housing program, 5 files were missing a signed form HUD-9886, 10 files did not have third-party income verification complete, 3 files did not have a signed lease or lease addendum signed, and 3 files had a lease or lease addendum signed four to seven months after the new rent took effect. Circumstances surrounding the recertification process have been affected by the COVID-19 pandemic and the resulting rent moratorium. Existing controls were designed with the expectation that if the participant did not comply with their end of the process, they would be removed from the program, and the Authority would still be compliant. Since the rent moratorium removed the Authority?s ability to evict tenants, the existing controls, although functioning, were not sufficient to ensure the Authority complied with the eligibility requirement to account for this unique situation. Criteria: As a condition of admission or continued occupancy, PHAs must require the tenant and applicable family members to provide necessary information and releases for the PHA to verify income eligibility, obtain and document the family file third-party verification of reported family income, and reexamine family income at least once every 12 months and adjust the tenant rent as necessary. Cause: The Authority did not adjust their controls over eligibility to ensure compliance requirements were met. Effect: Potential loss of funding due to noncompliance. Questioned Costs: None identified. Perspective: Based on the number of tenant files with findings, we believe this is a systemic event. Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Authority establishes processes and controls which ensure eligibility requirements are met. Auditee?s Response and Corrective Action Plan: See corrective action plan.