2023-004 Eligibility – Tenant Files Section 8 Housing Voucher Cluster (Section 8): Section 8 Housing Choice Vouchers Program – CFDA Number 14.871 Mainstream Vouchers – CFDA Number 14.879 Significant Deficiency in Internal Control and Other Matter to be Reported Under the Uniform Guidance This is a repeat finding of 2022-001, reported as a Material Weakness and Material Noncompliance from June 30, 2022 (initially occurred as Finding 2017-001, Material Weakness and Material Noncompliance) Condition: Out of a total tenant population of approximately 1452 vouchers, 25 files were selected for testing. Exceptions were noted as follows: • 3 tenant files where the wrong utility allowance was used, which caused a miscalculation in the tenants’ utility allowance rate but had no effect on the HAP rent. • 3 tenant files where the wrong utility allowance was used, which caused a miscalculation in the tenants’ utility allowance rate. Correcting these errors would cause the HAP rent to increase by $3 and decrease by $41 and $37 for each of the three tenant files. • 1 tenant file had the following issues: o The wrong utility allowance was used, which caused a miscalculation in the tenant’s utility allowance rate. Correcting this error would decrease the HAP rent by $52. o The tenant’s asset income was miscalculated, but the error itself would not have changed the HAP rent. • 1 tenant file had the following issues: o The wrong utility allowance was used, which caused a miscalculation in the tenant’s utility allowance rate. Correcting this error would cause the HAP rent to decrease by $14. o The tenant’s asset income was miscalculated and correcting this error would decrease the HAP rent by $13. • 1 tenant file where the tenant’s other source income was excluded from the tenant’s income on the 50058 form. Criteria: 24 CFR 982.516 requires internal controls to be in place to ensure compliance with HUD’s requirements, including complete and accurate tenant files. In addition, the Authority’s Administrative Plan also requires following proper procedures for determination of HAP and to maintain proper documentation in the tenant files. Questioned Costs: None. Effect: The Authority is not in compliance with all of HUD’s requirements regarding eligibility and tenant recertification, which could result in incorrect total tenant payments for rent and HAP payments to landlords. Cause: Procedures to ensure compliance with HUD’s requirements were not being carefully followed. Auditor’s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets, and case load. Views of Responsible Officials of the Auditee: The Authority agrees with the finding and has taken corrective action. See the “Action Taken” on the Corrective Action Plan.
2023-002 Reporting – Inaccurate and Late FDS Submission and Late OMB Data Collection Form Submission Public and Indian Housing Program – CFDA Number 14.850 Section 8 Housing Voucher Cluster (Section 8): Section 8 Housing Choice Vouchers Program – CFDA Number 14.871 Mainstream Vouchers – CFDA Number 14.879 Material Weakness in Internal Control and Material Noncompliance Criteria: The Real Estate Assessment Center ("REAC") requires an accurate and timely submission of the unaudited FDS information. The OMB Data Collection Form is due to be electronically filed with the FAC at the completion of a Single Audit (but no later than 9 months after fiscal year end, unless extended). Condition: The unaudited FDS filing was not submitted within the timeframes specified by HUD. The Authority submitted the unaudited FDS filing on October 13, 2023 (the due date was August 31, 2023). The Authority was also required to submit the OMB Data Collection form to the Federal Audit Clearinghouse (“FAC”) by March 31, 2024 at completion of the single audit, but was not filed timely as the audit was completed on October 8, 2025. Cause: The Authority did not have the necessary controls over the period-end financial reporting process to file the required submissions timely. The Authority experienced business disruptions due to staff absences and turnover. Effect: The Authority did not submit a correct unaudited FDS within the time frames required by HUD, and therefore, was noncompliant with this reporting requirement as well as the requirement to submit the OMB Data Collection Form during the required time frame. Failure to properly file these forms timely could lead to significant issues including delays in funding. Questioned Cost: None Auditor’s Recommendation: The Authority should make every effort to file its REAC submissions accurately and timely and submit the OMB Data Collection form timely. Views of Responsible Officials of the Auditee: We concur with the recommendation. Due to staff absences and turnover, we were unable to submit the unaudited FDS before the filing deadline, and we were unable to file the OMB Data Collection Form before the filing deadline. We are taking corrective action to ensure there is adequate staffing and sufficient processes in place to submit the unaudited FDS submission and the OMB Data Collection Form before the filing deadline.
2023-003 Special Tests and Provisions – Inter-Program Fund Management Public and Indian Housing Program – CFDA Number 14.850 Section 8 Housing Voucher Cluster (Section 8): Section 8 Housing Choice Vouchers Program – CFDA Number 14.871 Mainstream Vouchers – CFDA Number 14.879 Material Weakness in Internal Control, Material Noncompliance Condition: There were inter-program borrowings using federal funds which are unauthorized distributions, resulting in $3,943,604 of the total $4,164,790 in inter-program "due from" and "due to" balances lacking supporting documentation or reconciliation schedules. The unsupported balances primarily consist of significant amounts due to the Public Housing program, including $1,590,789 due to AMP 2 and $2,200,000 due to AMP 199 HOPE VI. These are offset by significant amounts owed by the Housing Choice Voucher program ($1,458,947) and the Central Office Cost Center ($2,190,705). Criteria: HUD regulations and the requirements of 2 CFR 200 specify that federal funds should be accounted for by program and used for their intended purposes. To ensure compliance, sound internal controls require that all balance sheet accounts, including inter-program "due from" and "due to" balances, are supported by detailed documentation that clarifies their purpose and confirms they are valid and recoverable. Questioned Costs: The entire unsupported inter-program balance of $3,943,604 is identified as a questioned cost. This is because the lack of documentation and the apparent use of funds from one federal program to cover the expenses of another is a violation of federal cash management requirements. Effect: This condition is considered a material weakness in internal control. It raises concerns regarding compliance with federal cash management regulations, as it becomes difficult to demonstrate that funds were managed appropriately without documentation. Furthermore, the unsupported balances compromise the reliability of the individual program-level financial records, making it difficult to confirm the collectability of amounts 'due from' one program and the completeness of amounts 'due to' another." Cause: A standardized process for documenting, authorizing, and settling inter-program cash activity has not yet been fully implemented. As a result, transfers have occurred to meet short-term cash needs, leading to the accumulation of large, unsupported balances over time. Auditor’s Recommendation: To strengthen internal controls and ensure compliance, it is recommended that the Authority perform a detailed analysis to identify and document the specific transactions comprising the outstanding inter-program balances. Based on this analysis, a formal plan should be developed to resolve and settle these balances. To prevent a recurrence, the Authority should also establish and implement written policies that outline clear requirements for proper authorization, documentation, and timely settlement of any future inter-program transactions. Specifically, the inter-program amounts should be settled every month and balances should not be carried forward. Finally, ongoing compliance can be ensured by incorporating a monthly reconciliation of all "due from" and "due to" accounts into the regular financial closing process. Views of Responsible Officials of the Auditee: The Authority agrees with the finding and has taken corrective action. See the “Action Taken” on the Corrective Action Plan.
Public and Indian Housing Program – CFDA Number 14.850 Material Weakness in Internal Control, Material Noncompliance This is a repeat finding of 2022-004, reported as a Material Weakness and Material Noncompliance from June 30, 2022 (initially occurred as Finding 2021-002, Material Weakness and Material Noncompliance) Condition: Out of a total tenant population of approximately 269 tenant files, 25 files were selected for testing. Exceptions were noted as follows: 1. 4 tenant files where the 214 Affidavit was not in the file or was incorrectly completed (2 files for missing 214 affidavits and 2 files where boxes were not checked to indicate adults were signing for dependents). 2. 5 tenant files where the tenant’s personal declaration form was missing for the time period tested. 3. 2 tenant files where the Form 9886 were missing for the time period tested. 4. 10 tenant files where there were income issues (including income calculation errors or missing support or missing Forms 50058). 5. 7 tenant files had deduction issues (several for deductions that were taken twice for food stamp income that was “excluded” and then deducted again, incorrect utility allowances, incorrect child care costs). 6. 1 tenant file where the Form 50058 was missing so unable to determine if recertification date was correct. 7. 4 tenant files with missing birth certificates 8. 1 tenant file where the tenant’s date of birth on the 50058 form did not match the tenant’s birth certificate. 9. 5 tenant files with missing social security cards. 10. 1 tenant file where the adult tenants did not sign the lease agreement. 11. 5 tenant files with missing EIVs. Criteria: 24 CFR 960.253 - 259 requires internal controls to be in place to ensure compliance with HUD’s requirements, as well as complete and accurate tenant files. In addition, the Authority’s Admissions and Continued Occupancy Policy (ACOP) requires the Authority to follow proper procedures for the determination of HAP and to maintain proper documentation in the tenant files. Questioned Costs: None. Effect: The Authority is not in compliance with all of HUD’s requirements regarding eligibility and tenant recertification, which could result in incorrect total tenant payments for rent. Cause: Procedures to ensure compliance with HUD’s requirements were not being carefully followed. Auditor’s Recommendation: The Authority should correct the deficiencies noted in the tested files and utilize an ongoing quality control review process on the entire tenant population to ensure proper compliance with the requirements related to tenant eligibility. Ongoing staff training and timely management reviews should be utilized to ensure staff is aware of acceptable procedures. In addition, the Authority should review staffing levels, skill sets and case load. Views of Responsible Officials of the Auditee: The Authority agrees with the finding and has taken corrective action. See the “Action Taken” on the Corrective Action Plan.