2023-001 ALN 14.871 – Housing Voucher Cluster – Eligibility
Condition and Criteria:
In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit
compliance requires that for tenant eligibility, tenant files include certain information and
documentation that is both accurate and complete such as to obtain and document third-party
verification of annual income and other factors that affect the determination of adjusted income
or income-based rent, and then properly calculate the rent payment using this documentation.
Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary
information, documentation, and releases for the Authority to verify income eligibility. Per 24
CFR 982 Subpart K, the Authority should maintain a utility allowance schedule, determine if
rent to owner is reasonable, and adopt a payment standard schedule that establishes voucher
payment standard amounts for each FMR area in the PHA jurisdiction.
During our audit, it was determined that internal control deficiencies over compliance existed
over the Authority’s Housing Voucher Cluster eligibility determination process. The Authority's
previous staff had inadequate internal controls over the Authority’s Section 8 tenant eligibility
process which has led to incomplete and inaccurate eligibility documentation. Out of ten tenant
files tested for eligibility compliance, 100% of these files had exceptions where there were either
missing third-party verification of income or deduction sources, missing or improperly filled out
HUD required forms, missing EIV (Enterprise Income Verification) documentation, lack of an
HQS inspection performed in the fiscal year, or instances in which the correct 50058 could not
be provided.
Context: H&P noted that 100% of the files tested had issues relating to missing third-party verification of
income or deduction sources, missing or improperly filled out HUD required forms, missing
EIV (Enterprise Income Verification) documentation, lack of an HQS inspection performed in
the fiscal year, or instances in which the correct 50058 could not be provided. There were three
instances noted where supporting third-party verification of income or deductions was missing.
There were two instances in which the annual reexamination was not done in a timely manner.
There were also three instances in which an HQS inspection was not performed in the fiscal
year. One instance in where the HAP payment did not tie to the HAP Register. We determined
that these internal control deficiencies and resulting noncompliance appeared to be consistent
and prevalent among the Authority's tenant files.
Questioned Costs: None.
Cause:
The Authority’s previous staff's internal controls over the Housing Voucher Cluster eligibility
determination process that were in place lacked the necessary controls over information and
communication of HUD regulatory requirements to properly follow HUD’s eligibility
requirements as determined by 24 CFR. There appears to be a lack of quality control procedures
in place regarding the monitoring of tenant files in order to catch inaccurate and/or incomplete
required tenant eligibility documentation and rent calculations.
Effect:
Some of the Authority’s tenants were not and/or potentially not receiving the correct amount of
Housing Assistance Payments, which in turn, can cause the tenants' portion of rent payments
owed to the landlords to be incorrect. Some of these tenants may still be receiving an erroneous
Housing Assistance Payment and could be paying the wrong amount to the landlords until the
staff and management can perform interim reexaminations or annual reexaminations. Auditor’s Recommendation:
We recommend the Authority's new Executive Director and staff review the internal controls
over Housing Voucher Cluster eligibility to improve the detection and correction of
misstatements. The Authority's new staff should be attentive when calculating the annualized
income for tenants and ensure that all third-party verification of income and deductions is being
obtained. The Authority should utilize effective monitoring controls to check the accuracy of
tenant rent calculations and payment standards for each initial lease-up and reexamination and,
if any errors have been made, the Authority can identify these quickly and take the necessary
corrective action. Additionally, the Authority should continue performing internal quality
control re-inspections (not to be performed by the same employee who performed the original
lease-up or reexamination but by someone with adequate knowledge of the tenant eligibility
process) of a sample of applicant and tenant files to ensure that all eligibility and reexamination
steps are being performed properly and in line with Federal regulations and the Authority's
Section 8 Administrative Plan policies and procedures.
Grantee Response: The Executive Director acknowledges the finding and is following the auditor’s
recommendation.
2023-003 ALN 14.871 – Housing Voucher Cluster – Waiting List
Condition and Criteria:
For compliance requirements related to selection from the waiting list, Housing Voucher Cluster
applicants must be selected from the Authority’s waiting list in accordance with the Authority’s
applicant selection policies documented in the Section 8 Administrative Plan and in accordance
with federal regulations. Per 24 CFR section 960.202, applicants must be admitted for
participation into the Program in accordance with HUD regulations and other requirements,
including the Authority’s policies stated in the Section 8 Admin Plan, and that the Authority’s
admission policy must state the system of admission preferences the Authority uses in
determining the applicant selection order from the waiting list, including preferences such as any
residency or other local preferences.
The Authority was unable to provide sufficient waiting list documentation to evidence the order
of the selection of applicants from the waiting list at any given time during the current audit
period. Therefore, this resulted in an inability to test the Waiting List applicant selection
procedures for internal controls and compliance.
Context: Testing on compliance over the order in which applicants were selected from the waiting list
was unavailable to be performed for the current audit period as supporting documentation for the
waiting list applicant selection procedures was unable to be obtained from or reproduced by the
Authority for testing.
Questioned Costs None.
Cause:
The Authority's previous staff did not utilize appropriate internal controls over the waiting list
applicant selection process. This resulted in the Authority not maintaining the appropriate
documentation to adequately provide information required by federal regulations and the Section
8 Administrative Plan policies and procedures so that the waiting list could be monitored for
proper compliance.
Effect:
Housing Voucher Cluster applicants could have been selected from the waiting list and admitted
to the program in the incorrect order in accordance with the Authority's applicant selection
policies included in the Authority's Section 8 Administrative Plan.
Auditor’s Recommendation:
The Authority's previous staff should have had a more effective set of monitoring controls in
place to verify that evidence supporting any and all selected applicants from the waiting list was
being documented and retained. The Authority's new management has already implemented
proper internal control procedures and is currently in the process of addressing and correcting
the internal control deficiencies and noncompliance.
Grantee Response: The Executive Director acknowledges the finding and is following the auditor’s
recommendation.
2023-001 ALN 14.871 – Housing Voucher Cluster – Eligibility
Condition and Criteria:
In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit
compliance requires that for tenant eligibility, tenant files include certain information and
documentation that is both accurate and complete such as to obtain and document third-party
verification of annual income and other factors that affect the determination of adjusted income
or income-based rent, and then properly calculate the rent payment using this documentation.
Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary
information, documentation, and releases for the Authority to verify income eligibility. Per 24
CFR 982 Subpart K, the Authority should maintain a utility allowance schedule, determine if
rent to owner is reasonable, and adopt a payment standard schedule that establishes voucher
payment standard amounts for each FMR area in the PHA jurisdiction.
During our audit, it was determined that internal control deficiencies over compliance existed
over the Authority’s Housing Voucher Cluster eligibility determination process. The Authority's
previous staff had inadequate internal controls over the Authority’s Section 8 tenant eligibility
process which has led to incomplete and inaccurate eligibility documentation. Out of ten tenant
files tested for eligibility compliance, 100% of these files had exceptions where there were either
missing third-party verification of income or deduction sources, missing or improperly filled out
HUD required forms, missing EIV (Enterprise Income Verification) documentation, lack of an
HQS inspection performed in the fiscal year, or instances in which the correct 50058 could not
be provided.
Context: H&P noted that 100% of the files tested had issues relating to missing third-party verification of
income or deduction sources, missing or improperly filled out HUD required forms, missing
EIV (Enterprise Income Verification) documentation, lack of an HQS inspection performed in
the fiscal year, or instances in which the correct 50058 could not be provided. There were three
instances noted where supporting third-party verification of income or deductions was missing.
There were two instances in which the annual reexamination was not done in a timely manner.
There were also three instances in which an HQS inspection was not performed in the fiscal
year. One instance in where the HAP payment did not tie to the HAP Register. We determined
that these internal control deficiencies and resulting noncompliance appeared to be consistent
and prevalent among the Authority's tenant files.
Questioned Costs: None.
Cause:
The Authority’s previous staff's internal controls over the Housing Voucher Cluster eligibility
determination process that were in place lacked the necessary controls over information and
communication of HUD regulatory requirements to properly follow HUD’s eligibility
requirements as determined by 24 CFR. There appears to be a lack of quality control procedures
in place regarding the monitoring of tenant files in order to catch inaccurate and/or incomplete
required tenant eligibility documentation and rent calculations.
Effect:
Some of the Authority’s tenants were not and/or potentially not receiving the correct amount of
Housing Assistance Payments, which in turn, can cause the tenants' portion of rent payments
owed to the landlords to be incorrect. Some of these tenants may still be receiving an erroneous
Housing Assistance Payment and could be paying the wrong amount to the landlords until the
staff and management can perform interim reexaminations or annual reexaminations. Auditor’s Recommendation:
We recommend the Authority's new Executive Director and staff review the internal controls
over Housing Voucher Cluster eligibility to improve the detection and correction of
misstatements. The Authority's new staff should be attentive when calculating the annualized
income for tenants and ensure that all third-party verification of income and deductions is being
obtained. The Authority should utilize effective monitoring controls to check the accuracy of
tenant rent calculations and payment standards for each initial lease-up and reexamination and,
if any errors have been made, the Authority can identify these quickly and take the necessary
corrective action. Additionally, the Authority should continue performing internal quality
control re-inspections (not to be performed by the same employee who performed the original
lease-up or reexamination but by someone with adequate knowledge of the tenant eligibility
process) of a sample of applicant and tenant files to ensure that all eligibility and reexamination
steps are being performed properly and in line with Federal regulations and the Authority's
Section 8 Administrative Plan policies and procedures.
Grantee Response: The Executive Director acknowledges the finding and is following the auditor’s
recommendation.
2023-003 ALN 14.871 – Housing Voucher Cluster – Waiting List
Condition and Criteria:
For compliance requirements related to selection from the waiting list, Housing Voucher Cluster
applicants must be selected from the Authority’s waiting list in accordance with the Authority’s
applicant selection policies documented in the Section 8 Administrative Plan and in accordance
with federal regulations. Per 24 CFR section 960.202, applicants must be admitted for
participation into the Program in accordance with HUD regulations and other requirements,
including the Authority’s policies stated in the Section 8 Admin Plan, and that the Authority’s
admission policy must state the system of admission preferences the Authority uses in
determining the applicant selection order from the waiting list, including preferences such as any
residency or other local preferences.
The Authority was unable to provide sufficient waiting list documentation to evidence the order
of the selection of applicants from the waiting list at any given time during the current audit
period. Therefore, this resulted in an inability to test the Waiting List applicant selection
procedures for internal controls and compliance.
Context: Testing on compliance over the order in which applicants were selected from the waiting list
was unavailable to be performed for the current audit period as supporting documentation for the
waiting list applicant selection procedures was unable to be obtained from or reproduced by the
Authority for testing.
Questioned Costs None.
Cause:
The Authority's previous staff did not utilize appropriate internal controls over the waiting list
applicant selection process. This resulted in the Authority not maintaining the appropriate
documentation to adequately provide information required by federal regulations and the Section
8 Administrative Plan policies and procedures so that the waiting list could be monitored for
proper compliance.
Effect:
Housing Voucher Cluster applicants could have been selected from the waiting list and admitted
to the program in the incorrect order in accordance with the Authority's applicant selection
policies included in the Authority's Section 8 Administrative Plan.
Auditor’s Recommendation:
The Authority's previous staff should have had a more effective set of monitoring controls in
place to verify that evidence supporting any and all selected applicants from the waiting list was
being documented and retained. The Authority's new management has already implemented
proper internal control procedures and is currently in the process of addressing and correcting
the internal control deficiencies and noncompliance.
Grantee Response: The Executive Director acknowledges the finding and is following the auditor’s
recommendation.