Audit 363610

Finding 2024-001 – 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 one hundred forty-five (145) Housing Choice Voucher tenant-based and project-based assistance tenant files and noted thirty-seven (37) files that were out of compliance. These files fell into one or more noncompliance categories: • Sixteen (16) files, or 11% of our sample, contained errors related to adjusted annual income. The income discrepancies consisted of eight (8) files with missing or outdated verification of income or deductions and eight (8) files with miscalculations of adjusted annual income. The extrapolated potential overstatement of HAP expense due to the identified understatement of adjusted annual income is reported as Questioned Costs. • Eighteen (18) files had not undergone an HQS inspection within the past 24 months as of fiscal year end 2024. Tenant-based HCV participants are required to have a unit inspection at least biennially per the Admin Plan. • Seven (7) files, or 4.8% of our sample, had an annual reexamination that was late by more than three months past the due date. This rate has decreased from 10.5% in the prior year audit. We noted that the difficulties faced by the Authority during the audit period included delays in getting tenants and third parties to return recertification documentation, changes in senior management, and transitioning from a 12-month to a 24-month HQS inspection schedule. 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 properly calculate annual income and conduct timely recertifications and unit inspections can result in paying out undue HAP 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. The Agency should continue to increase internal audits to ensure compliance and catch errors before they affect program payments. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Additionally, the Agency should more closely monitor participants that are nearing deadlines for unit inspections and annual reexaminations. Questioned Costs: Estimated at $34,653. This is equal to 0.11% of total HAP expense and is therefore immaterial to the financial statements. 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 Tenant Files – Eligibility – Internal Control over Tenant Files - Noncompliance & Significant Deficiency – Housing Choice Voucher Program – ALN #14.871 Condition & Cause: We reviewed one hundred forty-five (145) Housing Choice Voucher tenant-based and project-based assistance tenant files and noted thirty-seven (37) files that were out of compliance. These files fell into one or more noncompliance categories: • Sixteen (16) files, or 11% of our sample, contained errors related to adjusted annual income. The income discrepancies consisted of eight (8) files with missing or outdated verification of income or deductions and eight (8) files with miscalculations of adjusted annual income. The extrapolated potential overstatement of HAP expense due to the identified understatement of adjusted annual income is reported as Questioned Costs. • Eighteen (18) files had not undergone an HQS inspection within the past 24 months as of fiscal year end 2024. Tenant-based HCV participants are required to have a unit inspection at least biennially per the Admin Plan. • Seven (7) files, or 4.8% of our sample, had an annual reexamination that was late by more than three months past the due date. This rate has decreased from 10.5% in the prior year audit. We noted that the difficulties faced by the Authority during the audit period included delays in getting tenants and third parties to return recertification documentation, changes in senior management, and transitioning from a 12-month to a 24-month HQS inspection schedule. 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 properly calculate annual income and conduct timely recertifications and unit inspections can result in paying out undue HAP 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. The Agency should continue to increase internal audits to ensure compliance and catch errors before they affect program payments. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Additionally, the Agency should more closely monitor participants that are nearing deadlines for unit inspections and annual reexaminations. Questioned Costs: Estimated at $34,653. This is equal to 0.11% of total HAP expense and is therefore immaterial to the financial statements. Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.