Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements.
Questioned Costs: None
Context: During testing of a sample of 60 units for annual HQS inspections and 26 units for HQS quality control (QC) re-inspections, it was noted that 13 files did not comply with compliance requirements.
3 instances where the housing authority failed to perform biennial inspections of a unit.
10 instances where the housing authority failed to conduct the quality control re-inspection within 90 days of the initial inspection.
Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection requirements.
Effect: The Authority is not in compliance with federal regulations regarding HQS inspections.
Repeat Finding: No
Recommendation: We recommend that management review their controls for conducting HQS biennial and quality control re-inspections and ensure compliance standards are met.
Views of Responsible Officials: There is no disagreement with the audit finding. Previously, staff used a 90-day window to select Quality Control samples. Doing so caused some QC inspections to be completed past the regulatory time period. Going forward, staff are selecting the sample size from a 45-day window. This allows sufficient time to complete the QC inspection within the regulatory time period.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements.
Questioned Costs: None
Context: During testing of a sample of 60 units for annual HQS inspections and 26 units for HQS quality control (QC) re-inspections, it was noted that 13 files did not comply with compliance requirements.
3 instances where the housing authority failed to perform biennial inspections of a unit.
10 instances where the housing authority failed to conduct the quality control re-inspection within 90 days of the initial inspection.
Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection requirements.
Effect: The Authority is not in compliance with federal regulations regarding HQS inspections.
Repeat Finding: No
Recommendation: We recommend that management review their controls for conducting HQS biennial and quality control re-inspections and ensure compliance standards are met.
Views of Responsible Officials: There is no disagreement with the audit finding. Previously, staff used a 90-day window to select Quality Control samples. Doing so caused some QC inspections to be completed past the regulatory time period. Going forward, staff are selecting the sample size from a 45-day window. This allows sufficient time to complete the QC inspection within the regulatory time period.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23.
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA’s denial of assistance.
The PHA must schedule and send written notice of the informal review within 30 business days of the family’s request".
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority’s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant’s request.
Questioned Costs: None
Context: During testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements.
1 file where the housing authority failed to grant informal review at applicant request.
Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed.
Effect: The Authority is not in compliance with their administrative plan and HUD requirements.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request.
Views of Responsible Officials: There is no disagreement with the audit finding. The Agency hired a dedicated Hearing Officer following last year’s audit. Unfortunately, during the period in question, the Hearing Officer went on maternity leave and then subsequently left the position resulting in a delay in completing hearings and reviews. The Agency has since contracted with a 3rd party to conduct hearings and reviews in a timely manner.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23.
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA’s denial of assistance.
The PHA must schedule and send written notice of the informal review within 30 business days of the family’s request".
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority’s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant’s request.
Questioned Costs: None
Context: During testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements.
1 file where the housing authority failed to grant informal review at applicant request.
Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed.
Effect: The Authority is not in compliance with their administrative plan and HUD requirements.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request.
Views of Responsible Officials: There is no disagreement with the audit finding. The Agency hired a dedicated Hearing Officer following last year’s audit. Unfortunately, during the period in question, the Hearing Officer went on maternity leave and then subsequently left the position resulting in a delay in completing hearings and reviews. The Agency has since contracted with a 3rd party to conduct hearings and reviews in a timely manner.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615).
The PHA must do the following:
(1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259).
(a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program.
(b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2) an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities.
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements.
Questioned Costs: $7,936
Context: During our testing of a sample of 60 tenant files, it was noted that 20 files did not comply with compliance requirements.
1 instance where the income reported on the 50058 were not supported within the tenant file.
2 instances where the expenses reported on the 50058 were not supported within the tenant file.
3 instances where the housing authority failed to calculate the correct HAP/TAP
19 instances where the housing authority did not review the family income, assets and expenses on an annual basis.
Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy.
Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of tenant rent, HAP and verification of the tenants income.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants and HAP calculations are met. We also recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 10 files on a monthly basis. Agency working with Human Resources contractor to fill open staff positions.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615).
The PHA must do the following:
(1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259).
(a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program.
(b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2) an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities.
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements.
Questioned Costs: $7,936
Context: During our testing of a sample of 60 tenant files, it was noted that 20 files did not comply with compliance requirements.
1 instance where the income reported on the 50058 were not supported within the tenant file.
2 instances where the expenses reported on the 50058 were not supported within the tenant file.
3 instances where the housing authority failed to calculate the correct HAP/TAP
19 instances where the housing authority did not review the family income, assets and expenses on an annual basis.
Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy.
Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of tenant rent, HAP and verification of the tenants income.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants and HAP calculations are met. We also recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 10 files on a monthly basis. Agency working with Human Resources contractor to fill open staff positions.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 2 out of 40 files tested.
Questioned Costs: None
Context: During testing of a sample of 60 HUD 50058 forms, it was noted that 2 files did not comply with compliance requirements.
1 HUD-50058 form was not submitted into the PIC system within the regulatory period of 90 days.
1 HUD-50058 form was submitted into the PIC system, however, it returned with a fatal error that was not corrected by the housing authority.
Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system.
Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend that the person assigned to submit the 50058s to PIC assures a quality control review is performed on the submissions to ensure timely and accurate reporting.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 50058 submissions to PIC each month to ensure that all submissions are accurate in PIC. Additionally, the Agency is transitioning to Yardi software which should eliminate many of the submission issues caused by current enterprise software.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 2 out of 40 files tested.
Questioned Costs: None
Context: During testing of a sample of 60 HUD 50058 forms, it was noted that 2 files did not comply with compliance requirements.
1 HUD-50058 form was not submitted into the PIC system within the regulatory period of 90 days.
1 HUD-50058 form was submitted into the PIC system, however, it returned with a fatal error that was not corrected by the housing authority.
Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system.
Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend that the person assigned to submit the 50058s to PIC assures a quality control review is performed on the submissions to ensure timely and accurate reporting.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 50058 submissions to PIC each month to ensure that all submissions are accurate in PIC. Additionally, the Agency is transitioning to Yardi software which should eliminate many of the submission issues caused by current enterprise software.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Public and Indian Housing
Assistance Listing Number: 14.850
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/23-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances, such as when PHAs participate in the Moving to Work Demonstration Program (Assistance Listing 14.881) authorized by 204(c)(1) of Title II of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321-282. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Timing differences in a pooled cash environment would not be considered as temporary loans. Inter-fund transactions indicate the existence of temporary loans. Interfund receivables are recorded on FDS line 144 (Inter program – due from). In particular, inter-fund receivables should be reviewed to determine whether they are satisfied on a timely basis. In addition, FDS lines 10020 (Operating Transfers Out) and 10094 (Transfers Between Programs and Projects – Out) could indicate whether transfers out of the Operating Fund have been made. If PHAs have transferred funding out of the Operating Fund, proper authorization from HUD should be documented (42 USC 1437g(e)).
Condition: During testing, it was noted that the Authority did not properly monitor and reconcile its revolving fund between programs.
Questioned Costs: Unknown
Context: During our testing over interprogram accounts, it was noted that the COCC has amounts due to public housing under FDS lines 347 and 144 in the amount of $3,571,589. This is a result of the Authority using a revolving fund for expenses.
Cause: The Authority failed to properly monitor and reconcile its revolving fund between programs.
Effect: The Authority is not in compliance with requirements regarding use of operating funds.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-010.
Recommendation: We recommend the Authority establishes procedures to properly reconcile the revolving fund cash account to ensure that cash and interprogram accounts are properly reported at the program level.
Views of Responsible Officials: There is no disagreement with the audit finding. There are procedures in place to settle interfunds if possible.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Public and Indian Housing
Assistance Listing Number: 14.850
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The formula income is used to calculate the Operating Fund Revenue for each PHA. This calculation is generally based on prepopulated data calculated by HUD. However, in some cases Formula Income is not prepopulated. For further guidance review Formula Income Guidance the Operating Fund Web Page, the Annual Operating Subsidy Processing Notice and 24 CFR 990.195(d).
Condition: The HUD 52723 forms used for calculating subsidy contained errors. The Authority reported PILOT balances they did not have.
Questioned Costs: $91,552
Context: The Authority is required to complete HUD 52723 forms as part of their process of applying for subsidy. During this process, the Authority reported PILOT balances erroneously.
Cause: The Authority failed to maintain proper controls over their HUD 52723 forms.
Effect: The Authority received additional HUD funding in excess of what they would have otherwise received.
Recommendation: We recommend the Authority reviews their controls over submitting forms to HUD to ensure they contain accurate information.
Views of Responsible Officials: There is no disagreement with the audit finding. New CFO is preparing a Subsidy Calculation procedure so new staff will be aware of what is eligible and non-eligible transactions for preparing forms.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements.
Questioned Costs: None
Context: During testing of a sample of 60 units for annual HQS inspections and 26 units for HQS quality control (QC) re-inspections, it was noted that 13 files did not comply with compliance requirements.
3 instances where the housing authority failed to perform biennial inspections of a unit.
10 instances where the housing authority failed to conduct the quality control re-inspection within 90 days of the initial inspection.
Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection requirements.
Effect: The Authority is not in compliance with federal regulations regarding HQS inspections.
Repeat Finding: No
Recommendation: We recommend that management review their controls for conducting HQS biennial and quality control re-inspections and ensure compliance standards are met.
Views of Responsible Officials: There is no disagreement with the audit finding. Previously, staff used a 90-day window to select Quality Control samples. Doing so caused some QC inspections to be completed past the regulatory time period. Going forward, staff are selecting the sample size from a 45-day window. This allows sufficient time to complete the QC inspection within the regulatory time period.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements.
Questioned Costs: None
Context: During testing of a sample of 60 units for annual HQS inspections and 26 units for HQS quality control (QC) re-inspections, it was noted that 13 files did not comply with compliance requirements.
3 instances where the housing authority failed to perform biennial inspections of a unit.
10 instances where the housing authority failed to conduct the quality control re-inspection within 90 days of the initial inspection.
Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection requirements.
Effect: The Authority is not in compliance with federal regulations regarding HQS inspections.
Repeat Finding: No
Recommendation: We recommend that management review their controls for conducting HQS biennial and quality control re-inspections and ensure compliance standards are met.
Views of Responsible Officials: There is no disagreement with the audit finding. Previously, staff used a 90-day window to select Quality Control samples. Doing so caused some QC inspections to be completed past the regulatory time period. Going forward, staff are selecting the sample size from a 45-day window. This allows sufficient time to complete the QC inspection within the regulatory time period.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23.
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA’s denial of assistance.
The PHA must schedule and send written notice of the informal review within 30 business days of the family’s request".
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority’s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant’s request.
Questioned Costs: None
Context: During testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements.
1 file where the housing authority failed to grant informal review at applicant request.
Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed.
Effect: The Authority is not in compliance with their administrative plan and HUD requirements.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request.
Views of Responsible Officials: There is no disagreement with the audit finding. The Agency hired a dedicated Hearing Officer following last year’s audit. Unfortunately, during the period in question, the Hearing Officer went on maternity leave and then subsequently left the position resulting in a delay in completing hearings and reviews. The Agency has since contracted with a 3rd party to conduct hearings and reviews in a timely manner.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23.
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA’s denial of assistance.
The PHA must schedule and send written notice of the informal review within 30 business days of the family’s request".
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority’s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant’s request.
Questioned Costs: None
Context: During testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements.
1 file where the housing authority failed to grant informal review at applicant request.
Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed.
Effect: The Authority is not in compliance with their administrative plan and HUD requirements.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003.
Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request.
Views of Responsible Officials: There is no disagreement with the audit finding. The Agency hired a dedicated Hearing Officer following last year’s audit. Unfortunately, during the period in question, the Hearing Officer went on maternity leave and then subsequently left the position resulting in a delay in completing hearings and reviews. The Agency has since contracted with a 3rd party to conduct hearings and reviews in a timely manner.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615).
The PHA must do the following:
(1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259).
(a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program.
(b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2) an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities.
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements.
Questioned Costs: $7,936
Context: During our testing of a sample of 60 tenant files, it was noted that 20 files did not comply with compliance requirements.
1 instance where the income reported on the 50058 were not supported within the tenant file.
2 instances where the expenses reported on the 50058 were not supported within the tenant file.
3 instances where the housing authority failed to calculate the correct HAP/TAP
19 instances where the housing authority did not review the family income, assets and expenses on an annual basis.
Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy.
Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of tenant rent, HAP and verification of the tenants income.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants and HAP calculations are met. We also recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 10 files on a monthly basis. Agency working with Human Resources contractor to fill open staff positions.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615).
The PHA must do the following:
(1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259).
(a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program.
(b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2) an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities.
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements.
Questioned Costs: $7,936
Context: During our testing of a sample of 60 tenant files, it was noted that 20 files did not comply with compliance requirements.
1 instance where the income reported on the 50058 were not supported within the tenant file.
2 instances where the expenses reported on the 50058 were not supported within the tenant file.
3 instances where the housing authority failed to calculate the correct HAP/TAP
19 instances where the housing authority did not review the family income, assets and expenses on an annual basis.
Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy.
Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of tenant rent, HAP and verification of the tenants income.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-004.
Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants and HAP calculations are met. We also recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 10 files on a monthly basis. Agency working with Human Resources contractor to fill open staff positions.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 2 out of 40 files tested.
Questioned Costs: None
Context: During testing of a sample of 60 HUD 50058 forms, it was noted that 2 files did not comply with compliance requirements.
1 HUD-50058 form was not submitted into the PIC system within the regulatory period of 90 days.
1 HUD-50058 form was submitted into the PIC system, however, it returned with a fatal error that was not corrected by the housing authority.
Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system.
Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend that the person assigned to submit the 50058s to PIC assures a quality control review is performed on the submissions to ensure timely and accurate reporting.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 50058 submissions to PIC each month to ensure that all submissions are accurate in PIC. Additionally, the Agency is transitioning to Yardi software which should eliminate many of the submission issues caused by current enterprise software.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158).
Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 2 out of 40 files tested.
Questioned Costs: None
Context: During testing of a sample of 60 HUD 50058 forms, it was noted that 2 files did not comply with compliance requirements.
1 HUD-50058 form was not submitted into the PIC system within the regulatory period of 90 days.
1 HUD-50058 form was submitted into the PIC system, however, it returned with a fatal error that was not corrected by the housing authority.
Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system.
Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-005.
Recommendation: We recommend that the person assigned to submit the 50058s to PIC assures a quality control review is performed on the submissions to ensure timely and accurate reporting.
Views of Responsible Officials: There is no disagreement with the audit finding. Following CLA’s recommendation, SVP of Housing Choice will audit a random sample of 50058 submissions to PIC each month to ensure that all submissions are accurate in PIC. Additionally, the Agency is transitioning to Yardi software which should eliminate many of the submission issues caused by current enterprise software.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Public and Indian Housing
Assistance Listing Number: 14.850
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/23-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances, such as when PHAs participate in the Moving to Work Demonstration Program (Assistance Listing 14.881) authorized by 204(c)(1) of Title II of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321-282. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Timing differences in a pooled cash environment would not be considered as temporary loans. Inter-fund transactions indicate the existence of temporary loans. Interfund receivables are recorded on FDS line 144 (Inter program – due from). In particular, inter-fund receivables should be reviewed to determine whether they are satisfied on a timely basis. In addition, FDS lines 10020 (Operating Transfers Out) and 10094 (Transfers Between Programs and Projects – Out) could indicate whether transfers out of the Operating Fund have been made. If PHAs have transferred funding out of the Operating Fund, proper authorization from HUD should be documented (42 USC 1437g(e)).
Condition: During testing, it was noted that the Authority did not properly monitor and reconcile its revolving fund between programs.
Questioned Costs: Unknown
Context: During our testing over interprogram accounts, it was noted that the COCC has amounts due to public housing under FDS lines 347 and 144 in the amount of $3,571,589. This is a result of the Authority using a revolving fund for expenses.
Cause: The Authority failed to properly monitor and reconcile its revolving fund between programs.
Effect: The Authority is not in compliance with requirements regarding use of operating funds.
Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-010.
Recommendation: We recommend the Authority establishes procedures to properly reconcile the revolving fund cash account to ensure that cash and interprogram accounts are properly reported at the program level.
Views of Responsible Officials: There is no disagreement with the audit finding. There are procedures in place to settle interfunds if possible.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Public and Indian Housing
Assistance Listing Number: 14.850
Federal Award Identification Number and Year: LA003, 2023
Award Period: 10/1/22-9/30/23
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or Specific Requirement: The formula income is used to calculate the Operating Fund Revenue for each PHA. This calculation is generally based on prepopulated data calculated by HUD. However, in some cases Formula Income is not prepopulated. For further guidance review Formula Income Guidance the Operating Fund Web Page, the Annual Operating Subsidy Processing Notice and 24 CFR 990.195(d).
Condition: The HUD 52723 forms used for calculating subsidy contained errors. The Authority reported PILOT balances they did not have.
Questioned Costs: $91,552
Context: The Authority is required to complete HUD 52723 forms as part of their process of applying for subsidy. During this process, the Authority reported PILOT balances erroneously.
Cause: The Authority failed to maintain proper controls over their HUD 52723 forms.
Effect: The Authority received additional HUD funding in excess of what they would have otherwise received.
Recommendation: We recommend the Authority reviews their controls over submitting forms to HUD to ensure they contain accurate information.
Views of Responsible Officials: There is no disagreement with the audit finding. New CFO is preparing a Subsidy Calculation procedure so new staff will be aware of what is eligible and non-eligible transactions for preparing forms.