Housing Voucher Cluster Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Numbers: 14.871 and 14.879 Federal Award Identification Number and Year: FL080; 2025 Award Period: October 1, 2024 to September 30, 2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Noncompliance (Other Matters) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR section 982.516). Condition: During testing of 60 tenant files, eligibility-related exceptions were identified in 3 files. • In 1 instance, the Form HUD-50058 in effect during fiscal year 2025 per Yardi was dated 2022. No recertification for the tenant had been performed since. As a result, key recent eligibility elements, including household composition, income, assets, expenses, eligibility determinations, and the accuracy of the HAP calculation, could not be verified. • In 2 instances, HAP payments continued after tenants had vacated the assisted units and were no longer participating in the HCV program (end-of-participation dates of November 2023 and December 2023). The Authority was using old tenant data and was still paying HAP to the landlords in fiscal year 2025. For both households, the Authority initiated retroactive billing to recover HAP payments made after the tenant vacated; however, as of the date of testing, the funds had not been recovered from one landlord. Questioned Costs: $10,633 Context: Out of 60 tenant files tested, 3 tenant files contained errors as noted above. Cause: The Authority had inadequate monitoring controls over (1) timely updates and recertifications in the tenant file, including Form HUD-50058, and (2) the timely termination of HAP payments upon tenant move-out. Effect: Failure to maintain valid eligibility documentation and discontinue HAP payments timely increases the risk of: • Unsupported eligibility determinations and inaccurate HAP calculations • Improper payments to landlords for ineligible participants, resulting in potential questioned costs and noncompliance with HUD requirements. • Inaccurate and untimely information reported to HUD Repeat Finding: This is a repeat finding from previous years. The finding numbers were 2017-001, 2018-001, 2019-001, 2020-001, 2021-001, 2022-001, 2023-001, and 2024-001. Recommendation: We recommend the Authority strengthen internal controls over tenant recertifications to ensure: • Form HUD-50058 and supporting eligibility documentation are current, complete, and properly maintained for all tenants • Timely processing of tenant move-outs and termination of HAP payments • Ongoing monitoring procedures to identify and promptly resolve instances of continued payments after program exit, including timely recovery of any overpayments Views of Responsible Officials: There is no disagreement with the audit finding.
HQS Enforcement Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Numbers: 14.871 and 14.879 Federal Award Identification Number and Year: FL080; 2025 Award Period: October 1, 2024 to September 30, 2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Noncompliance (Other Matters) Criteria or Specific Requirement: For units under HAP contract that fail to meet HQS, the Authority must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified Authority-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the Authority must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During testing of 60 tenant files, HQS enforcement-related exceptions were identified in 1 file. • The Authority did not terminate the contract of 1 unit that failed to correct HQS deficiencies within the required timeframe. Questioned Costs: None. HAP was properly abated for this unit. Context: Out of 60 tenant files tested, 1 tenant file contained errors as noted above. Cause: The Authority had inadequate monitoring and enforcement controls over HQS follow-up procedures, including ensuring timely contract termination when required corrective actions are not completed timely. Effect: Failure to enforce HQS requirements increases the risk that: • Program participants occupy units that do not meet HUD housing quality standards, and • Improper HAP payments are made for noncompliant units, potentially resulting in questioned costs and noncompliance with HUD requirements. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Authority strengthen internal controls over HQS enforcement by implementing procedures to track and monitor HQS deficiencies and required correction timelines. Views of Responsible Officials: There is no disagreement with the audit finding.
Public Housing Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Low Rent Public Housing Assistance Listing Numbers: 14.850 Federal Award Identification Number and Year: FL080; 2025 Award Period: October 1, 2024 to September 30, 2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Noncompliance (Other Matters) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: During testing of 10 tenant files, eligibility related exceptions were identified in 2 files. • In 1 instance, tenant income was improperly excluded, resulting in an inaccurate rent/subsidy calculation. • In 1 instance, tenant income was improperly calculated, resulting in an inaccurate rent/subsidy calculation. Questioned Costs: $2,047 Context: Out of 10 tenant files tested, 2 tenant files contained errors as noted above. Cause: The Authority had inadequate controls over the income verification and calculation processes, including insufficient review procedures to ensure all income sources are properly identified, evaluated, and included in rent calculations. Effect: These deficiencies increase the risk that tenant rent and subsidy amounts are not calculated in accordance with HUD requirements, potentially resulting in: • Overpayments or underpayments of subsidy, • Incorrect tenant rent charges, and • Noncompliance with HUD regulations, which may lead to questioned costs. Repeat Finding: This is a repeat finding from previous years. The finding numbers were 2023-006 and 2024-006. Recommendation: We recommend the Authority strengthen internal controls over income determination and rent calculation by: • Enhancing procedures to ensure all sources of tenant income are properly identified, verified, and included in calculations • Providing additional training to staff on HUD income determination and rent calculation requirements • Implementing or strengthening supervisory review controls to detect and correct errors in a timely manner Views of Responsible Officials: There is no disagreement with the audit finding.