Audit 366709

Tenant Files – Family Income Reexaminations Criteria: Housing Commissions are required to obtain supportive documentation of income from tenants on an annual basis through the recertification process. This documentation may be in the form of copies of bank statements, paycheck stubs and various receipts for certain expenses that a tenant may have. The information obtained must be entered into the Tenant Itemized Worksheet so that the tenants’ rent can be accurately calculated. Along with the information provided by the tenant, Housing Commissions are required to verify certain information through the U.S. Department of Housing and Urban Development’s (HUD) Earned Income Verification (EIV) system. The information obtained through this method should be reflected in the Tenant Itemized Worksheet so that the calculation of monthly rent subsidy can be determined accurately. In addition, a copy of the Tenant Itemized Worksheet should be included in the tenants’ file. Condition: Of the 12 tenant files that were examined, 2 of the tenant files did not contain any current information that should be used to determine a rent calculation or other information that is otherwise required for an annual recertification. Of the 12 tenant files that were examined, 5 of the tenant files did contain information that should be used to determine a rent calculation however, the reexamination did not occur until July 2025 (after the end of the Housing Commission’s fiscal year). Cause: The Housing Commission experienced turnover in key positions responsible for performing essential duties, including maintaining tenant files near the beginning of the fiscal year. This turnover resulted in the Housing Commission not having adequate controls in place to ensure that all required information was included in the tenants’ file, along with ensuring that accurate information was used in calculating the tenants’ monthly rent. Effect: As a result of this condition, the Housing Commission lacks internal controls over the process for ensuring that tenant rent is properly calculated. This situation could result in tenants being charged improper amounts for rent which in turn could result in the Housing Commission receiving inaccurate funding amounts from HUD.

Tenant Files – Reasonable Rent Calculations Criteria: Housing Commissions are required to determine that the rent paid to the owner is reasonable in comparison to rent for other comparable unassisted units. The determination must consider unit attributes such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner. Condition: Of the 12 tenant files that were examined, 2 of the tenant files contained a reasonable rent calculation that concluded the rent being charged was deemed to not be reasonable. Of the 12 tenant files that were examined, 4 of the tenant files did not contain documentation of a reasonable rent calculation. Of the 12 tenant files that were examined, 6 of the tenant files did contain documentation of a reasonable rent calculation however, the calculation did not occur until July 2025 (after the end of the Housing Commission’s fiscal year). Cause: The Housing Commission experienced turnover in key positions responsible for performing essential duties, including maintaining tenant files near the beginning of the fiscal year. This turnover resulted in the Housing Commission not having adequate controls in place to ensure that all required information was included in the tenants’ file, along with ensuring that accurate information was used in calculating the tenants’ monthly rent. Effect: As a result of this condition, the Housing Commission lacks internal controls over the process for ensuring that tenant rent reasonableness is properly calculated. This situation could result in landlords being paid rent that exceeds guidelines established by HUD.

Tenant Files – Housing Quality Standards Inspections Criteria: Housing Commissions are required to inspect leased properties at least biennially to determine if the unit meets Housing Quality Standards (HQS) and must conduct quality control re-inspections. Condition: Of the 12 tenant files that were examined, 5 of the tenant files contained unit inspection reports that resulted in a “fail” conclusion because the inspection identified Housing Quality Standards deficiencies. None of the files that contained the failed inspection reports contained any documentation of re-inspection or notifications to the property owners. Cause: The Housing Commission experienced turnover in key positions responsible for performing essential duties, including HQS inspections near the beginning of the fiscal year. This turnover resulted in the Housing Commission not having adequate controls in place to ensure that HQS inspection requirements were complied with. Effect: As a result of this condition, the Housing Commission lacks internal controls over the process for ensuring that HQS inspections, re-inspections and enforcement criteria are being performed in accordance with applicable requirements.