Eligibility - E Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 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). 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). 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. Condition: The Commission did not follow its Administrative Plan designed to ensure compliance with eligibility requirements. Questioned costs: $1,128; this was calculated by determining the HAP payment that was paid during the time the Commission lacked support for income. Context: Out of 60 tenant files reviewed, the Commission did not obtain the required EIV report for one (1) tenant’s recertification. Cause: The Commission must verify income annually through obtaining an EIV report for each tenant’s annual recertification. The Commission did not run this in one instance. Effect: The Commission is not in compliance with HUD requirements. This could have an impact on HAP calculations. Repeat Finding: Yes, 2024-001 Recommendation: We recommend that the Commission review its process for collecting third party income support to ensure that accurate data is used as part of the rent and HAP calculation. Views of responsible officials: There is no disagreement with the audit finding.
HQS Inspections - N Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets 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)). Condition: The Commission did not follow its policies and procedures designed to ensure HQS inspections were performed timely. Questioned costs: None identified. The Authority did not complete the annual HQS inspection within the required timeframe for the unit tested. While this represents noncompliance with program requirements, we did not perform procedures to determine whether the delay was attributable to the Authority, the landlord, or the participant. As a result, we did not determine whether HAP payments made during the period of noncompliance were unallowable. Accordingly, questioned costs could not be determined. Context: During testing of 60 tenant files, exceptions were noted in the following: - 10 units sampled were not inspected on a biennial basis - 3 units were not inspected at least 2 years prior to the HUD-50058’s effective date that was selected for testing Cause: The Commission did not work closely with the third party inspection company to ensure inspections were being performed timely. Effect: The Commission is not in compliance with HUD requirements. This could have an impact on HAP calculations. Repeat finding: Yes, 2024-002 Recommendation: We recommend the Commission review its HQS inspection policies and procedures and discuss these standards with the third-party inspection company that it utilizes for these inspections to ensure all inspections are performed timely and that all necessary documentation is maintained for each inspection. Views of responsible officials: There is no disagreement with the audit finding.
HQS Failed Inspections - N Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) 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 Authorityapproved 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: The Commission did not properly enforce consequences to landlords or tenants of units that did not pass inspections in a timely manner. Questioned costs: $58,800; this was determined by calculating the HAP that should have been abated during the months the unit did not pass inspection. Context: During testing of 60 tenant files, exceptions were noted in the following: - 5 units sampled had failed inspections due to owner responsibilities for which the Commission never abated HAP - 3 results letters to the landlord and tenant did not include required correction period for any deficiencies (e.g. 24 hours for life threatening deficiencies, 30 days for all others) - 4 out of 60 files did not contain a unit inspection report documenting that repairs had been completed - 2 out of 60 files contained a failed inspection due to tenant responsibilities and family obligations were not enforced Cause: The Commission’s controls over inspections were not operating effectively. The Commission did not abate or enforce family obligations when inspections failed and landlords or tenants failed to fix the issues within the specified period. Effect: The Commission is not in compliance with HUD requirements. This could have an impact on HAP calculations. Repeat finding: Yes, 2024-003 Recommendation: We recommend that the Commission review their abatement procedures to ensure any unit that has not met the HQS standards is properly abated as well as review their procedures for enforcing correction of deficiencies to tenants. Views of responsible officials: There is no disagreement with the audit finding.
Allowable Costs, Payroll Disbursements - AB Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster FALN: 14.871/14.879 Federal Award Identification Number and Year: MD023, 2025 Award Period: 1/1/2025-12/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 2 CFR 200.430, compensation charged to federal awards must be reasonable, adequately documented, and supported by records that accurately reflect the work performed. Payroll costs charged to the Housing Voucher Cluster must be properly allocated based on actual services provided and supported by appropriate documentation. Condition: The Commission did not have adequate procedures in place to ensure time records were reconciled to payroll registers and that payroll costs charged to the Housing Choice Voucher Program were supported by documentation accurately reflecting actual payroll activity. Questioned costs: $1,545.25, see calculation determination under context. Context: During testing of 40 payroll files, exceptions were noted in the following: - For 1 sample, gross wages recalculated based on approved timesheet hours and authorized pay rates totaled $3,830.05, while gross wages recorded on the payroll register totaled $4,836.10, resulting in an unsupported variance of $1,006.05. - As a result of our testing, 2 more individuals were identified who had been paid incorrectly. Cause: The Commission did not have adequate procedures in place to ensure time records were reconciled to payroll registers and that payroll costs charged to the Housing Choice Voucher Program were supported by documentation accurately reflecting actual payroll activity. Effect: The Commission is not in compliance with HUD requirements. Repeat finding: No. Recommendation: We recommend the Commission implement procedures to ensure payroll costs charged to the Housing Voucher Cluster are properly supported, accurately allocated, and reconciled to payroll records. Management should review and approve payroll allocations and investigate any variances to ensure compliance with 2 CFR 200.430. Views of responsible officials: There is no disagreement with the audit finding.