Audit 389905

Finding 2025-001 – Moving To Work Demonstration Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Significant Deficiency Moving To Work Demonstration - subsidy ALN #14.881 Condition & Cause: Our review of one hundred seventy-one (171) Moving To Work tenant files found that twenty-three (23) files were noncompliant, representing 13.5% of our sample. Some files had multiple compliance issues. Specifically, we identified: • Eight (8) files with miscalculations of annual income • Two (2) files missing proper verification of income or deductions • Eleven (11) files missing the EIV report. • Four (4) files missing support for a unit inspection. • Three (3) files for which the annual reexamination was completed late. Using extrapolation, we concluded that the potential misstatement of subsidy from income miscalculations is $35,824, which is immaterial to the financial statements. The majority of the noncompliance occurred within the Low-Rent and Business Activities programs. Contributing factors included high staff turnover and inadequate oversight during the year. As a corrective measure, the Agency established new positions within the department during the fiscal year—including a director and an inspector—to strengthen oversight and improve compliance. Criteria: Compliance requirements are outlined in the Code of Federal Regulations, the Housing Authority’s Admissions and Continued Occupancy Policy (ACOP), Administrative Plan, Moving To Work (MTW) Plan, and specific HUD guidelines for documenting and maintaining Public Housing and Housing Choice Voucher tenant files. Effect: Failure to accurately calculate tenant income, obtain required verification, and conduct timely reexaminations may result in improper subsidy determinations, noncompliance with HUD regulations, and potential financial exposure. Additionally, missing EIV reports and inspection documentation reduce the Agency’s ability to ensure program integrity and housing quality standards. Ongoing noncompliance may also draw scrutiny from regulatory bodies. Recommendation: We recommend that the Agency enhance its internal controls over tenant files by strengthening standardized quality control procedures and support for supervisory oversight. Additionally, staff should receive regular training on HUD compliance requirements. Questioned Costs: $35,824 Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.