Finding: 2025-001 Incomplete Tenant Records – Section 8 HCV Program (ALN 14.871) Condition: During our review of forty (40) tenant files under the Section 8 Housing Choice Voucher (HCV) Program, we identified multiple instances of missing documentation and compliance lapses: 1. For one (1) tenant, income verification was not performed for the current year, and prior year income was rolled forward. The HUD-50058 (Family Report) form was reviewed in the PIC system but was not present in the tenant file. 2. For one (1) tenant, the Approved Lease, HUD-52517 (Request for Tenancy Approval), and HUD- 52641 (HAP Contract) forms were not present in the tenant file. Criteria: Under 2 CFR § 200.303, non-Federal entities are required to “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Additionally, 2 CFR § 200.302(b)(3) mandates that entities “maintain records which adequately identify the source and application of funds provided for federally-assisted activities.” HUD regulations governing the Section 8 Housing Choice Voucher Program (ALN 14.871) further require that tenant files include complete and timely documentation of income verification, lease approvals, and execution of required HUD forms such as HUD-50058 (Family Report), HUD-52517 (Request for Tenancy Approval), and HUD-52641 (Housing Assistance Payments Contract). These documents are essential to support eligibility determinations and ensure accurate Housing Assistance Payments. Cause: The deficiencies appear to result from inconsistent implementation of file maintenance procedures and inadequate internal controls over documentation and compliance tracking. There may also be a lack of staff training or oversight regarding HUD documentation requirements. Effect: Incomplete tenant records compromise the Housing Authority’s ability to demonstrate compliance with HUD regulations and the proper use of Federal funds. Missing documentation such as income verification and executed lease agreements may result in eligibility determinations that cannot be substantiated, increasing the risk of noncompliance. These issues could lead to program findings, reputational harm, or future funding restrictions if not addressed. Questioned Costs: There were no determinable questioned costs identified during the review. While documentation gaps were noted, the absence of supporting records did not allow for a reliable calculation of financial impact. Recommendation: We recommend that the Housing Authority strengthen internal controls over tenant file documentation by implementing a standardized checklist to ensure all required forms and records are consistently retained. Staff should receive periodic training on HUD documentation and compliance requirements to reinforce expectations and reduce errors. Management should also conduct routine internal reviews to verify that income verification and lease documentation are properly completed and maintained. These measures will help ensure that tenant eligibility and payment determinations are adequately supported and compliant with federal regulations. Reply and Corrective Action: To address these findings, the Housing Authority will implement a standardized checklist for all tenant file changes, ensuring that all required forms and records are consistently retained. The Program Administrator and staff will conduct monthly reviews of completed reexaminations to verify that all necessary documentation is present and properly filed. All paperwork related to annual reexaminations, transfers, move-ins, and interims will be scanned into the Lindsey software system within five working days of receipt, prior to physical filing. The Program Administrator will organize monthly training sessions on HCV/S8 program requirements, with participation tracked to ensure all staff attend. Weekly spot checks will be performed to confirm that the checklist is being used appropriately. These actions will be supported by updated training materials, access to the Lindsey software, and dedicated staff time for audits and training. To mitigate risks such as incomplete documentation, missed scanning deadlines, or low training attendance, the Housing Authority will implement pre-audit checklists, set automated reminders for staff, and make training mandatory. Management will monitor the implementation of these corrective actions and conduct follow-up reviews to ensure sustained compliance with HUD regulations.