Audit 318801

Finding 2023-001 – Housing Choice Voucher Tenant Files – Eligibility – Internal Control over Tenant Files - Noncompliance & Significant Deficiency Housing Choice Voucher Program – ALN #14.871 Condition & Cause: We reviewed two hundred thirty-nine (239) Housing Choice Voucher tenant-based and project-based assistance tenant files and noted forty-three (43) files that were out of compliance. These files fell into one or both of two noncompliance categories: • Twenty (20) files, or 8.4% of our sample, contained errors related to adjusted annual income. The income discrepancies consisted of twelve (12) files with missing or outdated verification of income and eight (8) files with miscalculations of adjusted annual income. The extrapolated impact of the net misstatement of adjusted annual income was immaterial to the financial statements. • Twenty-five (25) files had an annual reexamination that was completed more than three months past the due date. It was noted that the Authority has experienced difficulties in getting tenants and third parties to return recertification documentation. Criteria: The Code of Federal regulations, the Housing Authority Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Failure to conduct timely recertifications and to properly calculate annual income can result in a misstatement of HAP expense leading to improper funding for the HCV program. Misstatements of HAP may also cause an undue financial burden to the participant, which goes against the mission of the Agency. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We recommend that the Agency conduct a tenant file audit of existing tenants in the HCV program to determine the extent of any additional misstatements of HAP expense. We also recommend that the Agency increase their monitoring and quality control review of the HCV program files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2023-002 – Housing Choice Voucher Program – Internal Control over Waiting List – Noncompliance and Significant Deficiency Housing Choice Voucher Program - ALN #14.871 Condition & Cause: We reviewed the waitlists and selection documentation for a sample of newly leased tenants from the Housing Choice Voucher program. This review included tenant-based and project-based assistance. One (1) of the five (5) new admissions reviewed from the Project-Based Assistance waiting list was a targeted selection for elderly applicants aged 62 or older. We noted that the Agency did not conduct this selection according to their Admin Plan, which states “the first qualified applicant in sequence on the HCVP Project-Based Assistance Program waiting list will be made an offer of project-based assistance.” We sampled one hundred forty-nine (149) applicants who were in a higher rank on the waiting list than the new admission we selected for review. Of these, we noted twenty-nine (29) applicants, or 19%, who met the target criteria and were not selected for assistance. We reviewed the current procedures for selecting targeted applicants and found this process to be manual, burdensome, and prone to human error. However, at the time of the audit, the Agency was already working on a solution with their housing management software to automate this process. Criteria: The Code of Federal Regulations and the Housing Authority’s Admin Plan Effect: Failure to properly select and document the treatment of applicants from the waiting list can result in housing the wrong family as vouchers become available. This could result in a violation of the Fair Housing Act and other federal requirements. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We recommend that the Agency more closely adhere to the Admin Plan and Code of Federal Regulations regarding selections from the waitlist. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2023-001 – Housing Choice Voucher Tenant Files – Eligibility – Internal Control over Tenant Files - Noncompliance & Significant Deficiency Housing Choice Voucher Program – ALN #14.871 Condition & Cause: We reviewed two hundred thirty-nine (239) Housing Choice Voucher tenant-based and project-based assistance tenant files and noted forty-three (43) files that were out of compliance. These files fell into one or both of two noncompliance categories: • Twenty (20) files, or 8.4% of our sample, contained errors related to adjusted annual income. The income discrepancies consisted of twelve (12) files with missing or outdated verification of income and eight (8) files with miscalculations of adjusted annual income. The extrapolated impact of the net misstatement of adjusted annual income was immaterial to the financial statements. • Twenty-five (25) files had an annual reexamination that was completed more than three months past the due date. It was noted that the Authority has experienced difficulties in getting tenants and third parties to return recertification documentation. Criteria: The Code of Federal regulations, the Housing Authority Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Failure to conduct timely recertifications and to properly calculate annual income can result in a misstatement of HAP expense leading to improper funding for the HCV program. Misstatements of HAP may also cause an undue financial burden to the participant, which goes against the mission of the Agency. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We recommend that the Agency conduct a tenant file audit of existing tenants in the HCV program to determine the extent of any additional misstatements of HAP expense. We also recommend that the Agency increase their monitoring and quality control review of the HCV program files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2023-002 – Housing Choice Voucher Program – Internal Control over Waiting List – Noncompliance and Significant Deficiency Housing Choice Voucher Program - ALN #14.871 Condition & Cause: We reviewed the waitlists and selection documentation for a sample of newly leased tenants from the Housing Choice Voucher program. This review included tenant-based and project-based assistance. One (1) of the five (5) new admissions reviewed from the Project-Based Assistance waiting list was a targeted selection for elderly applicants aged 62 or older. We noted that the Agency did not conduct this selection according to their Admin Plan, which states “the first qualified applicant in sequence on the HCVP Project-Based Assistance Program waiting list will be made an offer of project-based assistance.” We sampled one hundred forty-nine (149) applicants who were in a higher rank on the waiting list than the new admission we selected for review. Of these, we noted twenty-nine (29) applicants, or 19%, who met the target criteria and were not selected for assistance. We reviewed the current procedures for selecting targeted applicants and found this process to be manual, burdensome, and prone to human error. However, at the time of the audit, the Agency was already working on a solution with their housing management software to automate this process. Criteria: The Code of Federal Regulations and the Housing Authority’s Admin Plan Effect: Failure to properly select and document the treatment of applicants from the waiting list can result in housing the wrong family as vouchers become available. This could result in a violation of the Fair Housing Act and other federal requirements. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We recommend that the Agency more closely adhere to the Admin Plan and Code of Federal Regulations regarding selections from the waitlist. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.