Audit 333725

Finding 2024-001 – Housing Choice Voucher Program Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Material Weakness - Housing Choice Voucher Program – ALN 14.871 Condition & Cause: We reviewed 100 Housing Choice Voucher tenant files to assess compliance with federal regulations and local policies. We found that 17 files had annual reexaminations completed more than three months past the due date, with an average delay of slightly over five months. Notably, the percentage of materially late reexaminations decreased from 27% in the previous year’s audit to 17% this year. Additionally, two files lacked documentation of a Housing Quality Standards (HQS) inspection conducted within the past 24 months. We attribute these discrepancies to the Agency’s ongoing challenges in hiring, training, and retaining qualified staff in the HCV department. We also observed discrepancies between the timeliness of annual reexaminations and the Authority’s FY 2024 SEMAP self-assessment for Indicator #9. Although we reviewed the supporting documentation for this indicator without finding deviations, it is important to investigate the discrepancy, especially since the Authority had a similar audit finding in the prior year (Finding 2023-001). Criteria: 24 CFR 982, the Housing Authority’s Administrative Plan, and specific HUD guidelines on documenting and maintaining Housing Choice Voucher tenant files. Effect: Late annual reexaminations can lead to inaccurate subsidy calculations, potentially resulting in overpayments or underpayments to landlords, thereby jeopardizing the program’s integrity. Recommendation: We recommend that the Agency identify and complete all overdue reexaminations promptly. The Agency should also continue to monitor this area for compliance to prevent future discrepancies. 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 2024-002 – Housing Choice Voucher Program – Internal Control over Waiting List – Noncompliance and Material Weakness - Housing Choice Voucher Program – ALN 14.871 Condition & Cause: During our review of the Section 8 waiting list, we assessed the audit trail for several tenants admitted in the fiscal year and were unable to gain assurance that the application and selection processes complied with the Agency’s Administrative Plan. Applications and preference updates received by the Agency were not entered into the internal Excel spreadsheet which constituted the waiting list. At the time, applications were only accepted in paper form and were not entered promptly due to administrative burdens. The Authority intended to update the waiting list as staff capacity allowed or when the highest preference point thresholds were depleted, a process that typically took over a year. Consequently, the Agency did not ensure that the waiting list accurately reflected housing needs. In our examination of a selection batch from May 2022, we reviewed a sample of sixty-nine (69) applicants. We found that no high preference point individuals were selected from this batch due to those preference point thresholds being depleted. Since the last waiting list generation was in April 2021, families who applied during the 13-month interim with higher preference points were not considered for housing because their applications had not been entered. Additionally, we found that the preference point ratio for selection, outlined in the Administrative Plan, was not upheld. This occurred because the Agency did not mail selection notices to a significant number of applicants in a timely manner. We also observed discrepancies between the waiting list admissions process and the Authority’s FY 2024 SEMAP self-assessment for Indicator #1. Although we reviewed the supporting documentation for this indicator without finding deviations, it is important to investigate the discrepancy, especially since the Authority had a similar audit finding in the prior year (Finding 2023-002). We note that the Authority has faced challenges in hiring, training, and retaining qualified staff in the HCV department. Furthermore, the largely manual processes in place during the audit period were prone to error, contributing to the potential non-compliance with the Administrative Plan. However, subsequent to year end, the Authority underwent a software conversion and updated local policies to simplify local preferences, which should alleviate the administrative burden associated with applications and selections from the waiting list. Criteria: 24 CFR 982 Subpart E and the Housing Authority’s Administrative Plan Effect: Delaying processing applications and informing applicants of selection undermines the integrity of the waiting list process, potentially leading to grievances from applicants who believe they were unfairly passed over. This could result in non-compliance with HUD regulations and could jeopardize future funding or program participation. Recommendation: We recommend that the Agency continue monitoring compliance in this area and evaluate the need for additional training for staff involved in the admissions process with the new housing software. The Agency should also ensure that the selection process is clearly communicated to all relevant staff and that any changes or updates are documented and disseminated promptly. 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 2024-001 – Housing Choice Voucher Program Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Material Weakness - Housing Choice Voucher Program – ALN 14.871 Condition & Cause: We reviewed 100 Housing Choice Voucher tenant files to assess compliance with federal regulations and local policies. We found that 17 files had annual reexaminations completed more than three months past the due date, with an average delay of slightly over five months. Notably, the percentage of materially late reexaminations decreased from 27% in the previous year’s audit to 17% this year. Additionally, two files lacked documentation of a Housing Quality Standards (HQS) inspection conducted within the past 24 months. We attribute these discrepancies to the Agency’s ongoing challenges in hiring, training, and retaining qualified staff in the HCV department. We also observed discrepancies between the timeliness of annual reexaminations and the Authority’s FY 2024 SEMAP self-assessment for Indicator #9. Although we reviewed the supporting documentation for this indicator without finding deviations, it is important to investigate the discrepancy, especially since the Authority had a similar audit finding in the prior year (Finding 2023-001). Criteria: 24 CFR 982, the Housing Authority’s Administrative Plan, and specific HUD guidelines on documenting and maintaining Housing Choice Voucher tenant files. Effect: Late annual reexaminations can lead to inaccurate subsidy calculations, potentially resulting in overpayments or underpayments to landlords, thereby jeopardizing the program’s integrity. Recommendation: We recommend that the Agency identify and complete all overdue reexaminations promptly. The Agency should also continue to monitor this area for compliance to prevent future discrepancies. 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 2024-002 – Housing Choice Voucher Program – Internal Control over Waiting List – Noncompliance and Material Weakness - Housing Choice Voucher Program – ALN 14.871 Condition & Cause: During our review of the Section 8 waiting list, we assessed the audit trail for several tenants admitted in the fiscal year and were unable to gain assurance that the application and selection processes complied with the Agency’s Administrative Plan. Applications and preference updates received by the Agency were not entered into the internal Excel spreadsheet which constituted the waiting list. At the time, applications were only accepted in paper form and were not entered promptly due to administrative burdens. The Authority intended to update the waiting list as staff capacity allowed or when the highest preference point thresholds were depleted, a process that typically took over a year. Consequently, the Agency did not ensure that the waiting list accurately reflected housing needs. In our examination of a selection batch from May 2022, we reviewed a sample of sixty-nine (69) applicants. We found that no high preference point individuals were selected from this batch due to those preference point thresholds being depleted. Since the last waiting list generation was in April 2021, families who applied during the 13-month interim with higher preference points were not considered for housing because their applications had not been entered. Additionally, we found that the preference point ratio for selection, outlined in the Administrative Plan, was not upheld. This occurred because the Agency did not mail selection notices to a significant number of applicants in a timely manner. We also observed discrepancies between the waiting list admissions process and the Authority’s FY 2024 SEMAP self-assessment for Indicator #1. Although we reviewed the supporting documentation for this indicator without finding deviations, it is important to investigate the discrepancy, especially since the Authority had a similar audit finding in the prior year (Finding 2023-002). We note that the Authority has faced challenges in hiring, training, and retaining qualified staff in the HCV department. Furthermore, the largely manual processes in place during the audit period were prone to error, contributing to the potential non-compliance with the Administrative Plan. However, subsequent to year end, the Authority underwent a software conversion and updated local policies to simplify local preferences, which should alleviate the administrative burden associated with applications and selections from the waiting list. Criteria: 24 CFR 982 Subpart E and the Housing Authority’s Administrative Plan Effect: Delaying processing applications and informing applicants of selection undermines the integrity of the waiting list process, potentially leading to grievances from applicants who believe they were unfairly passed over. This could result in non-compliance with HUD regulations and could jeopardize future funding or program participation. Recommendation: We recommend that the Agency continue monitoring compliance in this area and evaluate the need for additional training for staff involved in the admissions process with the new housing software. The Agency should also ensure that the selection process is clearly communicated to all relevant staff and that any changes or updates are documented and disseminated promptly. 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.