Audit 400305

Condition: Out of an approximate population of 20,000 of Housing Voucher Cluster, 40 tenant files were tested and the following deficiencies were noted: • Three files did not have annual recertifications within 12 months; • Three files did not have valid 9886 forms; • Two files did not have the required forms of identification; • Six files did not have third party verification of income; and • Seven files had incorrect HAP calculations. Additionally, the Authority was undergoing a digitalization process for tenant files in which they contracted a third-party company to scan and organize physical files to convert them to digital files. Due to a complication in the conversion process, the Authority was unable to provide six of the requested tenant files. Criteria: The Authority’s Administrative Plan and 24 CFR 982.516 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Context: The auditor randomly selected tenant files out of the population from each program as outlined, which we consider to be a statistically valid sample size. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Authority is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The deficiencies occurred due to weaknesses in the Authority’s internal controls designed to ensure tenant eligibility documentation is properly obtained, reviewed, and maintained in accordance with HUD requirements. In addition, during the fiscal year the Authority was undergoing a digitalization process to convert physical tenant files into electronic records through a contracted third-party vendor. Complications in the file conversion and organization process resulted in certain tenant files being temporarily unavailable for review. Effect: The Authority is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: Unknown Auditor Recommendations: The Authority should strengthen its internal controls over tenant eligibility documentation and file maintenance to ensure all required documentation is obtained, properly reviewed, and maintained in accordance with HUD requirements. Additionally, the Authority should implement procedures to ensure Housing Assistance Payment calculations are accurately performed and reviewed. The Authority should also ensure that all tenant files are complete and accessible following the transition to digital records. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. Management Response: See the Corrective Action Plan in this report.

Condition: While testing a sample of 40 new admissions to the program to ascertain if they were selected from the waiting list in accordance with the Authority’s applicant selection policies, the Authority was unable to provide supporting documentation for eight of the applicants who were issued vouchers during the year. Criteria: The Authority’s Administrative Plan and 24 CFR 982.516 require the Authority to maintain documentation supporting the administration of its waiting list, including records necessary to demonstrate that applicants are selected from the waiting list in accordance with established policies and HUD requirements. Context: The auditor randomly selected 40 waiting list applicant files for testing to determine whether applicants were selected from the waiting list in accordance with the Authority’s policies and HUD requirements. Eight of the requested files were not available for review. Cause: The condition occurred because the Authority was undergoing a digitalization process to convert physical records into electronic files through a contracted third-party vendor. Complications encountered during the file conversion and organization process resulted in certain waiting list files being temporarily unavailable for review. Effect: Because the requested documentation was not available for review, the auditor was unable to perform certain procedures related to waiting list testing for the eight files. Questioned Costs: Unknown Auditor Recommendations: We recommend the Authority ensure that all waiting list documentation is properly maintained and accessible, particularly during the transition to digital records, to allow for timely retrieval of supporting documentation when requested by the oversight agency or other third parties. Management Response: See the Corrective Action Plan in this report.