Audit 390558

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 forty (40) Low Rent Public Housing tenant files identified noncompliance in five (5) files, representing 12.5% of the sample. This reflects an improvement from the prior year’s noncompliance rate of 25%. All instances of noncompliance were related to the calculation of adjusted annual income. The most frequent error involved using net pay rather than gross pay when annualizing income. The Agency experienced challenges in hiring, training, and retaining qualified staff during the fiscal year. These staffing issues likely contributed to lapses in regulatory compliance and the accuracy of income calculations. All identified errors were associated with staff members who are no longer employed by the Authority. The extrapolated total potential misstatement was determined to be immaterial to the financial statements. Criteria: The Code of Federal Regulations, the Housing Authority’s Admissions and Continued Occupancy Policy (ACOP), and specific HUD guidelines in documenting and maintaining Public Housing tenant files. Effect: Improper calculation can lead to incorrect calculation of rental charges and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the Public Housing program. Recommendation: We recommend that the Agency continue to monitor and enhance its quality control procedures to ensure the accuracy and timeliness of income calculations and reexaminations, to assess the need for further staff training, and to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. 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 & Material Weakness – Section 8 Housing Choice Voucher Program – ALNs #14.871 and #14.EHV Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher Tenant Files and found fourteen (14) files that were not compliant, representing 21.5% of our audit sample. All identified errors were related to the determination of adjusted annual income. Specifically, • Nine (9) files included miscalculations of income or deductions, primarily due to incorrect pay frequency assumptions or improper projections using year-to-date income. • Three (3) files lacked proper verification of income or deductions • Two (2) files did not have timely income reexaminations. In one case, a tenant who was transferring units went more than twelve months without a current income reexamination. In the other, a tenant claiming zero income was not reexamined at the six-month mark, as required by the Administrative Plan. The Agency experienced ongoing challenges in hiring, training, and retaining qualified staff throughout the fiscal year. These staffing limitations likely contributed to inconsistent adherence to HUD and local requirements, affecting the accuracy of tenant income determinations. As a mitigating factor, we have observed increased quality control measures and staff retention has improved from prior year. We extrapolated the potential total misstatement and determined it to be immaterial to the financial statements. However, given the high rate of errors, these conditions present a risk that future misstatements could become material to the financial statements. Criteria: The Code of Federal regulations, the Housing Authority’s Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper calculation and documentation of tenant income and untimely income reexaminations can lead to the incorrect calculation of HAP subsidies and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the HCV program. Recommendation: We recommend that the Agency continue to monitor and enhance its quality control procedures to ensure the accuracy and timeliness of income calculations and reexaminations, to assess the need for further staff training, and to effectively monitor compliance with both HUD regulations and local policies. 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.