Audit 408789

Finding 2025-001 Subject: – Housing Voucher Cluster – Eligibility – Payment Standards Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster Assistance Listings Number: 14.871 Federal Award Number and Year (or Other Identifying Number): HUD PHA No. IN007 – Federal Award Year 2025 Pass-Through Entity: N/A Compliance Requirement: Eligibility – Payment Standards Audit Findings: Significant Deficiency Condition and Criteria: The 2025 OMB Compliance Supplement, Housing Voucher Cluster, Special Tests and Provisions, requires Public Housing Authorities to administer the Housing Choice Voucher Program in accordance with HUD requirements. Under 24 CFR § 982.158, the Housing Authority must maintain complete and accurate records. Form HUD-50058 data should be accurately completed and submitted in accordance with applicable HUD requirements. Payment standards reported on the form should reflect the Housing Authority’s approved payment standards used in the administration of the Housing Choice Voucher program. During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements related to the accurate reporting of payment standards. Amount of Questioned Costs: None Context: During testing of 25 Housing Choice Voucher tenant files within the housing voucher cluster, we noted that 14 tenant files contained inaccurately reported payment standard amounts on Form HUD-50058. Management indicated this issue was caused by a limitation within the Housing Authority’s software system. Specifically, when the combined rent and utility allowance amount is lower than the actual payment standard, the software requires the lower amount to be entered in the payment standard field in order for the Housing Assistance Payment (HAP) calculation to process correctly. If the actual payment standard is lower than the rent plus utility allowance amount, the software allows the correct payment standard to be entered without issue. As a result, the Housing Authority knowingly entered inaccurate payment standard amounts on certain HUD-50058 submissions in order to ensure accurate HAP calculations. Cause: The condition was caused by limitations within the Housing Authority’s software system. Effect: Inaccurate reporting on Form HUD-50058 resulted in noncompliance with HUD reporting requirements and impacted the reliability and accuracy of tenant and program data maintained by HUD. Auditor’s Recommendation: We recommend the Housing Authority work with the software provider to correct the system limitation to allow accurate reporting of payment standards while maintaining proper HAP calculations. If the issue cannot be resolved, management should consider implementing alternative software that allows for accurate HUD-50058 reporting and calculation functionality. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation.