Unsupported MTW Capital Fund Program (CFP) Drawdowns Funds (ALN 14.881)
Condition: During testing of the Moving to Work Demonstration Program - Capital Fund Program, we selected a sample of eight eLOCCS drawdown vouchers for review. Of these, the Authority was unable to provide sufficient supporting documentation to substantiate the eligibility, timing, or purpose of the drawdowns for two vouchers. In addition, for one voucher, the Authority did not provide evidence of immediate obligations or expenditures to support the drawdown, indicating a potential violation of the federal “just-in-time” funding requirement.
Criteria: Under 2 CFR §200.302(b)(3) and §200.305(b), non-Federal entities must maintain adequate documentation to support all federal fund drawdowns and ensure that funds are drawn only when needed for immediate disbursement. Additionally, under the Moving to Work Demonstration Program (ALN 14.881), participating agencies must adhere to the terms of their HUD-approved MTW Agreement, which incorporates applicable requirements of the Uniform Guidance, including principles of financial management and internal control. MTW agencies must ensure that drawdowns are supported by actual, timely obligations and expenditures, and must maintain records sufficient to permit the tracing of funds to a level that ensures proper use in accordance with MTW statutory purposes and HUD requirements.
Cause: The Authority lacked sufficient internal controls to ensure that drawdowns were properly documented at the time of request and reimbursement requests aligned with immediate, allowable expenditures.
Effect:
The drawdowns associated with the two unsupported vouchers are considered potentially unallowable, and the improperly timed drawdown may be noncompliant with federal cash management standards, increasing the risk of recapture, repayment, or audit findings.
Questioned Costs: $1,501,783
Recommendation: The Authority should establish or strengthen internal procedures to ensure all drawdown requests are tied to documented and eligible obligations and align with HUD’s “just-in-time” funding policy. Additionally, the Authority should train staff on federal documentation and cash management requirements under 2 CFR Part 200 and HUD guidance.
Reply and Corrective Action Plan: To address documentation gaps and timing issues in MTW Capital Fund drawdowns, the Authority will implement a process requiring that all drawdown requests be accompanied by complete supporting documentation. Each request will be reviewed for eligibility and compliance with “just-in-time” funding requirements prior to approval by the Executive Director.
Incomplete Support for Capital Fund Program (CFP) Drawdown Sample (ALN 14.872)
Condition: As part of the testing of the Capital Fund Program (CFP) major program, a sample of six drawdown vouchers was selected for review. The Public Housing Authority (Authority) was unable to provide adequate supporting documentation for one voucher in the sample. The missing documentation prevented verification of the eligibility, timing, and allowability of the associated expenditures.
Criteria: Under 2 CFR §200.302(b)(3) and §200.305(b), recipients of federal awards must maintain financial records that identify the source and application of federal funds and ensure that all drawdowns are based on actual, allowable, and allocable costs. HUD also requires that all drawdown activity be supported by sufficient records to allow for audit and monitoring review.
Cause: The Authority did not have sufficient internal controls or procedures in place to ensure complete documentation was retained and made available for all drawdowns under the CFP program.
Effect: The unsupported drawdown identified in the sample raises concerns about the reliability of the Authority’s internal controls over the Capital Fund Program (CFP) drawdown process, may indicate a broader risk of noncompliance affecting the allowability of other drawdowns, and increases the risk of repayment, audit findings, and potential program sanctions due to inadequate supporting documentation.
Questioned Costs: $299,305
Recommendation: The Authority should strengthen internal control procedures to ensure all Capital Fund Program (CFP) drawdowns are fully supported and audit-ready, and provide staff training on federal documentation and record retention requirements under 2 CFR Part 200 and applicable HUD guidance.
Reply and Corrective Action Plan: The Authority will implement a process to ensure that all Capital Fund Program drawdown requests are supported by documentation that verifies eligibility, timing, and allowability. This includes a review step to confirm completeness before submission.
Missing Required Moving to Work (MTW) Demonstration Program Documentation (ALN 14.881)
Condition: During our review of the Authority's administration of the MTW Program, the Authority was unable to provide a copy of its Annual Contributions Contract (ACC), which serves as the foundational agreement between the Authority and HUD for the receipt and use of federal funds.
Criteria: Under 2 CFR §200.302 and §200.334, non-Federal entities must maintain effective control over and access to records that support compliance with federal program requirements. The MTW Operations Notice (85 FR 10232) and the Authority's MTW ACC Amendment require that the PHA maintain and certify compliance with its MTW Plan and statutory objectives. The ACC establishes the legal basis for receiving and administering MTW-related federal funds.
Cause: The Authority did not have adequate internal procedures to ensure that foundational program documents were retained, tracked, and made available for audit and oversight purposes.
Effect: The absence of the Annual Contributions Contract (ACC) impairs verification of the Authority's legal authority to receive and administer HUD funds under the MTW program and may result in HUD compliance findings, delayed approvals, or other administrative sanctions.
Questioned Costs: None
Recommendation: The Authority should obtain and retain a copy of its executed ACC for audit and HUD monitoring purposes and establish or strengthen internal controls to track and retain all required MTW program records and certifications in accordance with HUD guidance and federal record retention requirements.
Reply and Corrective Action Plan: The Authority will locate and archive its Annual Contributions Contract (ACC) to ensure compliance with HUD documentation requirements.
nadequate Tenant File Documentation and Inconsistencies in MTW Housing Assistance and Public Housing Records (ALN 14.881)
Condition: During tenant file testing for both the Housing Choice Voucher (HCV) and Public Housing (PH) components of the Moving to Work (MTW) Demonstration Program, we identified multiple deficiencies in the Authority's documentation and reporting practices:1. For the MTW HAP (HCV) sample, the Authority did not properly complete the "Summary Decision on the Unit" section of the HUD Form 52580-A, which documents the final pass or fail outcome of the Housing Quality Standards (HQS) inspection. As a result, it could not be confirmed whether the unit met HQS requirements at the time of assistance.
2. In six out of twenty-three HCV tenant files tested, housing assistance payments did not agree with the amounts reported on HUD Form 50058, and no reconciliations or explanations were provided.
3. For one out of twenty-three HCV tenants, the Authority was unable to provide a Form 50058 covering the period for which the HAP payment was selected, leaving the payment unsupported.
4. In the MTW Public Housing sample, five out of seventeen tenant files contained discrepancies between tenant receipts or rent register balances and the amounts reported on HUD Form 50058, without adequate explanation or reconciliation.
5. For one out of seventeen Public Housing tenants, the Authority was unable to provide any support for either the receipt from or payment to the tenant for the period tested.Criteria: Under 2 CFR §200.302 and §200.303, the Authority must maintain financial management systems and internal controls sufficient to ensure that costs are allowable, supported, and in compliance with program requirements. The MTW Operations Notice and HUD program rules require PHAs to complete and retain accurate HUD Forms 50058 and 52580-A to support rent calculations, assistance payments, and unit eligibility. The Summary Decision on the Unit section of Form 52580-A is critical to documenting compliance with HQS requirements before assistance can begin or continue.
Cause: The Authority lacked effective internal controls and monitoring procedures over tenant file documentation, rent calculation, inspection recordkeeping, and HUD form completion and retention.
Effect: Failure to properly complete HQS documentation may signal noncompliance with unit inspection requirements and tenant safety standards, while inconsistencies and missing Forms 50058 undermine the reliability of rent and assistance calculations. Additionally, the absence of supporting documentation for tenant receipts or HAP payments results in unsupported costs, increasing the risk of overpayments, underpayments, or questioned costs under the MTW program.
Questioned Costs: $378,340
Recommendation: The Authority should establish procedures to ensure that all required forms, including HUD 50058 and 52580-A with completed Summary Decision sections, are accurately filled out and retained in tenant files. Regular reconciliations between payment records, rent ledgers, and HUD reporting systems should be performed to maintain data integrity. Additionally, staff should receive training on HQS documentation, rent and assistance calculations, and federal recordkeeping requirements. To reinforce compliance with MTW and HUD program rules, periodic internal reviews of tenant files should also be conducted.Reply and Corrective Action Plan: The Authority will implement procedures to ensure that HUD Form 52580-A is fully completed for all HQS inspections, establish reconciliation processes for HAP and tenant rent payments against HUD Form 50058, and document any discrepancies. These steps aim to improve the accuracy and completeness of tenant records.
Unsupported MTW Capital Fund Program (CFP) Drawdowns Funds (ALN 14.881)
Condition: During testing of the Moving to Work Demonstration Program - Capital Fund Program, we selected a sample of eight eLOCCS drawdown vouchers for review. Of these, the Authority was unable to provide sufficient supporting documentation to substantiate the eligibility, timing, or purpose of the drawdowns for two vouchers. In addition, for one voucher, the Authority did not provide evidence of immediate obligations or expenditures to support the drawdown, indicating a potential violation of the federal “just-in-time” funding requirement.
Criteria: Under 2 CFR §200.302(b)(3) and §200.305(b), non-Federal entities must maintain adequate documentation to support all federal fund drawdowns and ensure that funds are drawn only when needed for immediate disbursement. Additionally, under the Moving to Work Demonstration Program (ALN 14.881), participating agencies must adhere to the terms of their HUD-approved MTW Agreement, which incorporates applicable requirements of the Uniform Guidance, including principles of financial management and internal control. MTW agencies must ensure that drawdowns are supported by actual, timely obligations and expenditures, and must maintain records sufficient to permit the tracing of funds to a level that ensures proper use in accordance with MTW statutory purposes and HUD requirements.
Cause: The Authority lacked sufficient internal controls to ensure that drawdowns were properly documented at the time of request and reimbursement requests aligned with immediate, allowable expenditures.
Effect:
The drawdowns associated with the two unsupported vouchers are considered potentially unallowable, and the improperly timed drawdown may be noncompliant with federal cash management standards, increasing the risk of recapture, repayment, or audit findings.
Questioned Costs: $1,501,783
Recommendation: The Authority should establish or strengthen internal procedures to ensure all drawdown requests are tied to documented and eligible obligations and align with HUD’s “just-in-time” funding policy. Additionally, the Authority should train staff on federal documentation and cash management requirements under 2 CFR Part 200 and HUD guidance.
Reply and Corrective Action Plan: To address documentation gaps and timing issues in MTW Capital Fund drawdowns, the Authority will implement a process requiring that all drawdown requests be accompanied by complete supporting documentation. Each request will be reviewed for eligibility and compliance with “just-in-time” funding requirements prior to approval by the Executive Director.
Incomplete Support for Capital Fund Program (CFP) Drawdown Sample (ALN 14.872)
Condition: As part of the testing of the Capital Fund Program (CFP) major program, a sample of six drawdown vouchers was selected for review. The Public Housing Authority (Authority) was unable to provide adequate supporting documentation for one voucher in the sample. The missing documentation prevented verification of the eligibility, timing, and allowability of the associated expenditures.
Criteria: Under 2 CFR §200.302(b)(3) and §200.305(b), recipients of federal awards must maintain financial records that identify the source and application of federal funds and ensure that all drawdowns are based on actual, allowable, and allocable costs. HUD also requires that all drawdown activity be supported by sufficient records to allow for audit and monitoring review.
Cause: The Authority did not have sufficient internal controls or procedures in place to ensure complete documentation was retained and made available for all drawdowns under the CFP program.
Effect: The unsupported drawdown identified in the sample raises concerns about the reliability of the Authority’s internal controls over the Capital Fund Program (CFP) drawdown process, may indicate a broader risk of noncompliance affecting the allowability of other drawdowns, and increases the risk of repayment, audit findings, and potential program sanctions due to inadequate supporting documentation.
Questioned Costs: $299,305
Recommendation: The Authority should strengthen internal control procedures to ensure all Capital Fund Program (CFP) drawdowns are fully supported and audit-ready, and provide staff training on federal documentation and record retention requirements under 2 CFR Part 200 and applicable HUD guidance.
Reply and Corrective Action Plan: The Authority will implement a process to ensure that all Capital Fund Program drawdown requests are supported by documentation that verifies eligibility, timing, and allowability. This includes a review step to confirm completeness before submission.
Missing Required Moving to Work (MTW) Demonstration Program Documentation (ALN 14.881)
Condition: During our review of the Authority's administration of the MTW Program, the Authority was unable to provide a copy of its Annual Contributions Contract (ACC), which serves as the foundational agreement between the Authority and HUD for the receipt and use of federal funds.
Criteria: Under 2 CFR §200.302 and §200.334, non-Federal entities must maintain effective control over and access to records that support compliance with federal program requirements. The MTW Operations Notice (85 FR 10232) and the Authority's MTW ACC Amendment require that the PHA maintain and certify compliance with its MTW Plan and statutory objectives. The ACC establishes the legal basis for receiving and administering MTW-related federal funds.
Cause: The Authority did not have adequate internal procedures to ensure that foundational program documents were retained, tracked, and made available for audit and oversight purposes.
Effect: The absence of the Annual Contributions Contract (ACC) impairs verification of the Authority's legal authority to receive and administer HUD funds under the MTW program and may result in HUD compliance findings, delayed approvals, or other administrative sanctions.
Questioned Costs: None
Recommendation: The Authority should obtain and retain a copy of its executed ACC for audit and HUD monitoring purposes and establish or strengthen internal controls to track and retain all required MTW program records and certifications in accordance with HUD guidance and federal record retention requirements.
Reply and Corrective Action Plan: The Authority will locate and archive its Annual Contributions Contract (ACC) to ensure compliance with HUD documentation requirements.
nadequate Tenant File Documentation and Inconsistencies in MTW Housing Assistance and Public Housing Records (ALN 14.881)
Condition: During tenant file testing for both the Housing Choice Voucher (HCV) and Public Housing (PH) components of the Moving to Work (MTW) Demonstration Program, we identified multiple deficiencies in the Authority's documentation and reporting practices:1. For the MTW HAP (HCV) sample, the Authority did not properly complete the "Summary Decision on the Unit" section of the HUD Form 52580-A, which documents the final pass or fail outcome of the Housing Quality Standards (HQS) inspection. As a result, it could not be confirmed whether the unit met HQS requirements at the time of assistance.
2. In six out of twenty-three HCV tenant files tested, housing assistance payments did not agree with the amounts reported on HUD Form 50058, and no reconciliations or explanations were provided.
3. For one out of twenty-three HCV tenants, the Authority was unable to provide a Form 50058 covering the period for which the HAP payment was selected, leaving the payment unsupported.
4. In the MTW Public Housing sample, five out of seventeen tenant files contained discrepancies between tenant receipts or rent register balances and the amounts reported on HUD Form 50058, without adequate explanation or reconciliation.
5. For one out of seventeen Public Housing tenants, the Authority was unable to provide any support for either the receipt from or payment to the tenant for the period tested.Criteria: Under 2 CFR §200.302 and §200.303, the Authority must maintain financial management systems and internal controls sufficient to ensure that costs are allowable, supported, and in compliance with program requirements. The MTW Operations Notice and HUD program rules require PHAs to complete and retain accurate HUD Forms 50058 and 52580-A to support rent calculations, assistance payments, and unit eligibility. The Summary Decision on the Unit section of Form 52580-A is critical to documenting compliance with HQS requirements before assistance can begin or continue.
Cause: The Authority lacked effective internal controls and monitoring procedures over tenant file documentation, rent calculation, inspection recordkeeping, and HUD form completion and retention.
Effect: Failure to properly complete HQS documentation may signal noncompliance with unit inspection requirements and tenant safety standards, while inconsistencies and missing Forms 50058 undermine the reliability of rent and assistance calculations. Additionally, the absence of supporting documentation for tenant receipts or HAP payments results in unsupported costs, increasing the risk of overpayments, underpayments, or questioned costs under the MTW program.
Questioned Costs: $378,340
Recommendation: The Authority should establish procedures to ensure that all required forms, including HUD 50058 and 52580-A with completed Summary Decision sections, are accurately filled out and retained in tenant files. Regular reconciliations between payment records, rent ledgers, and HUD reporting systems should be performed to maintain data integrity. Additionally, staff should receive training on HQS documentation, rent and assistance calculations, and federal recordkeeping requirements. To reinforce compliance with MTW and HUD program rules, periodic internal reviews of tenant files should also be conducted.Reply and Corrective Action Plan: The Authority will implement procedures to ensure that HUD Form 52580-A is fully completed for all HQS inspections, establish reconciliation processes for HAP and tenant rent payments against HUD Form 50058, and document any discrepancies. These steps aim to improve the accuracy and completeness of tenant records.