Audit 406028

Finding 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Assistance Listing Numbers: 14.871 Noncompliance - E. Eligibility - Tenant Files Noncompliance Material to the Financial Statements: No Significant deficiency 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 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). 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 814 units. Of a sample size of twenty-one (21) tenant files, one (1) tenants' HUD-50058 form contained an income miscalculation during the tenant's annual reexamination process. Our sample size is statistically valid. Known Questioned Costs: $13,000 Cause: There is a significant deficiency in internal controls for the Section 8 Housing Choice Vouchers Program over the compliance for the eligibility type of compliance related to the maintenance of tenant files. Controls were not operating effectively to ensure tenant income calculations reported on the HUD-50058 form were properly reviewed for accuracy and compliance with HUD requirements. Effect: The Section 8 Housing Choice Vouchers Program is in noncompliance with the eligibility requirements of the program. Errors in tenant income calculations and recertification documentation could result in participants being determined eligible based on inaccurate information, which may lead to noncompliance with HUD eligibility requirements and improper housing assistance payments. Recommendation: We recommend that the Authority strengthen and consistently apply internal control procedures over tenant eligibility determinations and HUD-50058 recertification reviews to help ensure compliance with HUD requirements and the Uniform Guidance. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Program and will train staff on the proper maintenance of tenant files and implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Federal Catalog Numbers: 14.871 Noncompliance – N. Special Tests and Provisions – HQS Enforcement Noncompliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: HQS Enforcement. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the Housing Quality Standards (HQS) and the Authority 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 discussions with management, the Authority did not properly abate (2) housing assistance payments. Context: Of a sample size of twenty-five (25) failed inspections, the Authority did not properly abate two (2) out of twenty-five (25) housing assistance payments. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: $18,690 Cause: There is a material weakness in internal controls over compliance for the special tests and provisions type of compliance related to HQS enforcement. Controls were not operating effectively to ensure housing assistance payments were properly abated. Effect: The Section 8 Housing Choice Vouchers program is in material noncompliance with the special tests and provisions type of compliance related to HQS enforcement. Recommendation: We recommend that the Authority implement a process whereby Authority personnel are hired and trained on HQS enforcement that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Section 8 Housing Choice Vouchers Programs and has implemented a process to prevent the same issues from occurring. The Authority will also continue to train staff on HQS enforcement and enhance it's internal control procedures that will ensure compliance with federal regulations.