Audit 372511

Finding 2025-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of 35 Public Housing tenant files identified noncompliance in 6 files (17.1%). Of these, 2 files (5.7%) contained errors related to the verification of adjusted annual income. Both overall and income-related error rates increased compared to the prior year. Specific findings include: 1 file missing proper income verification 1 file missing proper deduction verification 3 files missing the EIV report for reexaminations 1 file missing support for an annual unit inspection 3 files missing a quarterly EIV review for zero-income households Contributing factors include insufficient quality control review procedures, high turnover in key leadership positions, and an ongoing transition to electronic tenant file systems. Criteria: HUD regulations (24 CFR § 5 and § 960) require accurate verification of income and deductions, documented annual reexaminations, and annual unit inspections. The Agency’s Admissions and Continued Occupancy Policy (ACOP) requires quarterly EIV reviews for households reporting zero income. All relevant documentation must be maintained in tenant files. Effect: Missing or inaccurate verifications and documentation may result in incorrect rent determinations, noncompliance with HUD requirements, and potential financial exposure. These issues may also impact program integrity and increase the risk of audit or monitoring findings. Recommendation: We recommend that the Authority establish a systematic review process for tenant files to ensure accuracy. This process should incorporate comprehensive staff training in correct verification methods and include regular quality control checks to promptly identify and correct errors. Furthermore, the Authority should ensure stricter adherence to its ACOP. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2025-001 – Housing Choice Voucher Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster – ALN 14.871 and 14.EHV Condition & Cause: Our review of 150 Housing Choice Voucher tenant files identified noncompliance in 28 files (18.7%). Of these, 8 files (5.3%) contained errors related to income miscalculations, improper deductions, or missing income verification. Both overall and income-related error rates increased compared to the prior year. Specific findings include: 1 file missing documentation for the annual reexamination, including income verification, continued occupancy application, and release of information authorization 7 files with incorrect annual income calculations 4 files with unverified or improper income deductions 2 files missing the EIV report for reexaminations 18 files missing a quarterly EIV review for zero-income households These errors were primarily due to manual calculation mistakes coupled with insufficient review procedures. Contributing factors also include high turnover in key leadership positions and an ongoing transition to electronic tenant file systems. Criteria: HUD regulations (24 CFR § 5 and § 982) require accurate income verification, proper rent calculations, use of the EIV system, and annual reexaminations. The Agency’s Administrative Plan additionally requires quarterly income reviews for households reporting zero income. All supporting documentation must be maintained in tenant files. Effect: Incorrect income calculations and missing documentation can lead to inaccurate subsidy payments, tenant over- or underpayments, noncompliance with HUD requirements, and potential repayment obligations. These issues also increase audit risk and reduce program integrity. Recommendation: We recommend that the Authority establish a systematic review process for income calculations to ensure accuracy. This process should incorporate comprehensive staff training in correct calculation methods and include regular quality control checks to promptly identify and correct errors. Furthermore, the Authority should ensure stricter adherence to its Administrative Plan. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.