Finding 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Federal Assistance Listing Numbers: 14.871 Noncompliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately three hundred forty five (345) Section 8 Housing Choice Voucher units. Of a sample size of fifteen (15) tenant files, the following information was unavailable for examination at the time of audit: Original applications were missing in six (6) files Citizenship declaration forms were missing in three (3) files Lead based paint form was missing in one (1) file Copy of signed lease was missing in three (3) files Verification of income and assets was missing in two (2) files Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers program is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Federal Assistance Listing Numbers: 14.871 Noncompliance - N. Special Tests and Provisions - Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The Authority must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract)(24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: Based upon inspection of the Authority's files and discussions with management, there were newly leased units for which rent reasonableness evaluations were not performed. Context: There were approximately seventeen (17) newly leased Section 8 Housing Choice Voucher units. Of a sample size of two (2) newly leased units, rent reasonableness evaluations for one (1) unit was not performed. Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. Existing controls were not properly designed, implemented, or maintained to ensure that rent reasonableness requirements are consistently met. Effect: The Section 8 Housing Choice Vouchers program is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that ensure all rent reasonableness determinations are performed and documented, in compliance with Uniform Guidance and the compliance supplement.
Finding 2025-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Federal Assistance Listing Numbers: 14.871 Noncompliance – N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that failed inspections that did not pass reinspection within 30 days without penalty. Context: There were approximately eleven (11) Section 8 Housing Choice Vouchers units with failed inspections. Of a sample size of two (2) failed inspections, two (2) failed inspections did not pass reinspection within 30 days. Housing assistance payments were not abated nor was the tenant relocated. Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed annual HQS inspections in compliance with program requirements. Effect: The Section 8 Housing Choice Vouchers program is in non-compliance with the eligibility type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.