Audit 369599

Inadequate Documentation and Rent Calculation Discrepancies - Public Housing Program (ALAN 14.850) Condition: During the tenant file testing for the Public Housing program, we reviewed a sample of forty tenant files and identified deficiencies in the Authority's documentation and reporting practices: 1. For two tenants the rent amounts did not match the amounts documented on the HUD-50058 forms. 2. For seven tenants the unit inspection forms were not available. Criteria: Under the HUD Compliance Supplement for Assistance Listing 14.850 - Public Housing Operating Fund, Public Housing Agencies (Phase) must comply with core occupancy procedures, including: 1. Determination of income and rent 2. Maintenance of inspection records for units occupied by tenants. These requirements are designed to ensure accurate rent calculations and proper documentation of tenant eligibility and housing conditions. Cause: The Authority transitioned to a new accounting software in the fiscal year, which contributed to gaps in documentation and inconsistencies in rent calculations. Additionally, internal controls were not sufficiently adapted to ensure complete documentation and accurate rent billing during and after the transition. Effect: These deficiencies may result in noncompliance with HUD regulations, inaccurate financial reporting, and increased risk of undetected errors or mismanagement. Questioned Costs: $3,251 Recommendation: We recommend that the Authority enhance its internal control environment to ensure compliance with HUD requirements under Assistance Listing 14.850. This includes implementing procedures to verify that all required documentation—such as Unit Inspection records—is consistently obtained and retained in tenant files. Additionally, the Authority should establish a reconciliation process to confirm that rent amounts charged align with those calculated on the HUD-50058 forms. Reply and Corrective Action Plan: During 2024 there were some employee changes in Public Housing management as well as a computer virus that affected our server. The Authority has implemented new procedures to include a hard copy of required documents as well as an electronic copy. The Senior Public Housing manager will also be conducting file reviews to verify that these records are complete for each tenant file. The Authority changed software vendors during 2024. The software is designed to calculate rent amounts and report that amount on the HUD 50058 form. The conversion between the two software systems led to inaccurate information on the HUD- 50058. This should not be an ongoing issue as the conversion has been completed and corrections made. -