Audit 303633

Criteria: Organizations operating the Section 8 Housing Assistance Payment Program are required to maintain sufficient internal controls to ensure compliance with eligibility requirements. Condition: 1) Housing assistance and tenant payments for 2 of the 40 tenant files selected for testing were calculated incorrectly due to errors in the amounts used for income. 2) The asset values for 10 of the 40 tenant files and the interest income for 3 of the 40 tenant files selected for testing were not reported correctly on Form HUD-50059. This had no impact on the housing assistance and tenant payments. 3) There was not sufficient documentation for 2 of the 40 tenant files selected for testing to support the asset values reported on Form HUD-50059. 4) 1 of the 40 tenant files selected for testing was missing an Existing Tenant Search report. 5) The Existing Tenant Search report for 2 of the 40 tenant files selected for testing stated that the tenants may be receiving rental assistance at another housing agency, however there was no evidence to show that the Community had followed up with the tenant and/or the housing agency to avoid a double subsidy. Cause: Procedures to ensure that the required information and documentation were obtained and maintained did not exist. Effect: The housing assistance payments and tenant payments may potentially be incorrect. Auditor's Recommendation: We recommend that an internal control procedure be implemented to ensure that all HUD-50059 forms are completed accurately and all required information is obtained and maintained within the tenant files. Views of Responsible Officials and Planned Corrective Action: 1) Management will meet with tenants to properly investigate causation for the finding above. Management will correct the audited annual recertification with the expectation of correcting the income used to tabulate the tenants’ level of rental assistance. For the file where the tenant was overcharged, the tenant will be reimbursed for administrative error. For the file where the rental subsidy was being overcharged, HUD will be reimbursed for the subsidy accordingly. 2) Management will correct all audited annual recertifications with correct asset values and/or interest income. Management will also insert file clarification notes to all files that are edited to ensure transparency and notate that the corrected asset values and/or interest income will not affect the tenants’ level of rental assistance. Management will implement internal control procedures to ensure that all asset and interest income values are reported correctly in the future. 3) Management will meet with tenants to properly investigate causation for the finding above. Management will correct annual recertification reporting and properly document tenant files accordingly. Management will implement internal control procedures to ensure that staff is only accepting proper verifications per the HUD handbook in the future. 4) Management will ensure that the tenant has an Existing Tenant Search report in the file. Management has removed all tenant information that does not correspond to this tenant file. Management will implement internal control procedures to ensure that documents are not being misfiled. 5) Management will meet with tenants to properly investigate causation for the finding above. Management will determine if possible double subsidies exist. Management will follow up with respective PHA or owner if necessary to confirm if the tenant is being assisted at the other location. Management will properly document all contacts made or information obtained to determine if a household is receiving multiple subsidies or not. When the tenants’ multiple subsidies are discussed and resolved, management will ensure that all evidence is included within the tenant file.

Criteria: Housing quality inspections must be performed at the time of initial occupancy and at least annually thereafter to assure that the units are decent, safe, and sanitary. In addition, the inspection reports should be maintained in the correspondence tenant files. Condition: 8 of the 40 required annual housing quality inspections selected for testing had not been completed within one year of the previous inspection. Cause: Procedures to ensure that the required annual housing inspections were performed within one year of the previous inspection did not exist. Effect: Housing could potentially not meet the requirement that it be decent, safe, and sanitary. Auditor's Recommendation: We recommend that an internal control procedure to ensure that the required annual housing inspections are performed within one year of the previous inspection be implemented. Views of Responsible Officials and Planned Corrective Action: Management will continue to work consistently to comply with performing unit inspections on at least an annual basis to determine whether the appliances and equipment in the units are functioning properly. Management will ensure that annual inspections commence in April 2024 to ensure that all units are inspected within 365 days of the last unit inspection.

Criteria: Organizations operating the Section 8 Housing Assistance Payment Program are required to maintain sufficient internal controls to ensure compliance with eligibility requirements. Condition: 1) Housing assistance and tenant payments for 2 of the 40 tenant files selected for testing were calculated incorrectly due to errors in the amounts used for income. 2) The asset values for 10 of the 40 tenant files and the interest income for 3 of the 40 tenant files selected for testing were not reported correctly on Form HUD-50059. This had no impact on the housing assistance and tenant payments. 3) There was not sufficient documentation for 2 of the 40 tenant files selected for testing to support the asset values reported on Form HUD-50059. 4) 1 of the 40 tenant files selected for testing was missing an Existing Tenant Search report. 5) The Existing Tenant Search report for 2 of the 40 tenant files selected for testing stated that the tenants may be receiving rental assistance at another housing agency, however there was no evidence to show that the Community had followed up with the tenant and/or the housing agency to avoid a double subsidy. Cause: Procedures to ensure that the required information and documentation were obtained and maintained did not exist. Effect: The housing assistance payments and tenant payments may potentially be incorrect. Auditor's Recommendation: We recommend that an internal control procedure be implemented to ensure that all HUD-50059 forms are completed accurately and all required information is obtained and maintained within the tenant files. Views of Responsible Officials and Planned Corrective Action: 1) Management will meet with tenants to properly investigate causation for the finding above. Management will correct the audited annual recertification with the expectation of correcting the income used to tabulate the tenants’ level of rental assistance. For the file where the tenant was overcharged, the tenant will be reimbursed for administrative error. For the file where the rental subsidy was being overcharged, HUD will be reimbursed for the subsidy accordingly. 2) Management will correct all audited annual recertifications with correct asset values and/or interest income. Management will also insert file clarification notes to all files that are edited to ensure transparency and notate that the corrected asset values and/or interest income will not affect the tenants’ level of rental assistance. Management will implement internal control procedures to ensure that all asset and interest income values are reported correctly in the future. 3) Management will meet with tenants to properly investigate causation for the finding above. Management will correct annual recertification reporting and properly document tenant files accordingly. Management will implement internal control procedures to ensure that staff is only accepting proper verifications per the HUD handbook in the future. 4) Management will ensure that the tenant has an Existing Tenant Search report in the file. Management has removed all tenant information that does not correspond to this tenant file. Management will implement internal control procedures to ensure that documents are not being misfiled. 5) Management will meet with tenants to properly investigate causation for the finding above. Management will determine if possible double subsidies exist. Management will follow up with respective PHA or owner if necessary to confirm if the tenant is being assisted at the other location. Management will properly document all contacts made or information obtained to determine if a household is receiving multiple subsidies or not. When the tenants’ multiple subsidies are discussed and resolved, management will ensure that all evidence is included within the tenant file.

Criteria: Housing quality inspections must be performed at the time of initial occupancy and at least annually thereafter to assure that the units are decent, safe, and sanitary. In addition, the inspection reports should be maintained in the correspondence tenant files. Condition: 8 of the 40 required annual housing quality inspections selected for testing had not been completed within one year of the previous inspection. Cause: Procedures to ensure that the required annual housing inspections were performed within one year of the previous inspection did not exist. Effect: Housing could potentially not meet the requirement that it be decent, safe, and sanitary. Auditor's Recommendation: We recommend that an internal control procedure to ensure that the required annual housing inspections are performed within one year of the previous inspection be implemented. Views of Responsible Officials and Planned Corrective Action: Management will continue to work consistently to comply with performing unit inspections on at least an annual basis to determine whether the appliances and equipment in the units are functioning properly. Management will ensure that annual inspections commence in April 2024 to ensure that all units are inspected within 365 days of the last unit inspection.