Audit 411338

Finding 2025-004: Eligibility – Housing Voucher Cluster Federal Program: Housing Voucher Cluster Assistance Listing No.: 14.871/14.879 Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: None Federal Award Identification Number: ME901VO/COVID-19/ME901E/ME901DV Repeat Finding: This is not a repeat finding Criteria – HUD regulations require Public Housing Authorities (PHAs) to annually recertify family composition, income and other eligibility factors and accurately report beneficiary information on Form HUD-50058. Changes in family composition must be properly reflected in the tenant record to ensure the correct voucher size, payment standard, tenant rent calculation and Housing Assistance Payment (HAP) subsidy are determined in accordance with HUD requirements. Condition – We identified one instance where a household receiving a housing choice voucher had a family member move out between their interim and annual recertifications. At the time of annual recertification, their household composition was not updated to reflect one less family member in the form 50058. This impacted the bedroom voucher calculation, the family payment standard used, the tenant rent to owner and the HAP subsidy. This resulted in overpaid HAPs for four months during 2025. Questioned costs – We identified known questioned costs of $1,340 in overpaid HAPs during 2025. Likely questioned costs are statistically projected estimates of unallowable expenses across an entire population when an error is found in a tested sample. We have extrapolated an error rate based on HAPs paid in our sample across the entire HAP population and estimate projected likely questioned costs of $157,529. Cause – The error occurred because controls over the annual recertification process did not ensure that information previously processed through an interim certification was accurately carried forward and verified on the annual recertification and corresponding Form HUD-50058 submission. Effect or potential effect – Failure to accurately update family composition during annual recertifications may result in incorrect voucher sizing, tenant rent calculations and HAP subsidies. Consequently, federal housing assistance may be overpaid or underpaid, resulting in noncompliance with HUD program requirements and inaccurate subsidy determinations. Context – We tested a statistically valid sample of annual certifications to recalculate aspects of the HAP calculations for compliance with HUD requirements. One exception was identified in which a family composition change was not accurately reflected in the annual recertification record, resulting in an incorrect bedroom size and payment standard being used for subsidy calculations. Recommendation – We recommend MaineHousing strengthen review procedures over annual recertifications to ensure all family composition changes processed through interim certifications are accurately incorporated into annual recertifications and Form HUD-50058 submissions. Management should implement supervisory review procedures to verify voucher size determinations, payment standards, tenant rent calculations and HAP calculations before recertifications are finalized. Additionally, management should evaluate whether any subsidy adjustments or recovery actions are required for the affected participant. Views of responsible officials – Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Audit Findings.

Finding 2025-001: Reporting – Community Development Block Grants/State’s Program and Non- Entitlement Grants in Hawaii Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii Assistance Listing No.: 14.228 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: None Federal Award Identification Number: B-20/B-22/B-23/B-24-RH-23-0001 Repeat Finding: This is not a repeat finding Criteria – MaineHousing is required to submit annual financial and performance reports to the U.S. Department of Housing and Urban Development (HUD) as part of its administration of the Recovery Housing Program under the Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii. Condition – During 2025, MaineHousing did not file their Federal Financial Report or their Performance Report on a timely basis. Questioned costs – None. Cause – The Federal Financial Reports and Performance Report were submitted late due to difficulty in uploading and submitting information to the HUD portals and lack of sufficient follow-up to resolve the issue. Effect or potential effect – Reports are not submitted timely in accordance with federal guidelines. Context – Our sample of reports was a statistically valid sample. Of our sample of four Federal Financial Reports and one Performance Report, none were submitted timely. Recommendation – MaineHousing should enhance controls over the tracking, completion and review of the program reporting to ensure that the due dates are monitored and adhered to. Views of responsible officials – Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Audit Findings.

Finding 2025-002: Eligibility – Temporary Assistance for Needy Families Federal Program: Temporary Assistance for Needy Families Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Maine State Department of Health and Human Services Federal Award Identification Number: OFI-23-201/OFI-25-201 Repeat Finding: This is not a repeat finding Criteria – The Temporary Assistance for Needy Families (TANF) program requires that assistance payments be made only to eligible participants. Eligibility requirements include the presence of a dependent child meeting the program’s age requirements, generally a child under age 18 residing in the household. Federal awards must be administered in accordance with applicable federal and state eligibility requirements. Condition – One of the sampled beneficiaries for program eligibility did not meet program eligibility requirements at the time assistance was approved and paid. Specifically, the participant household did not contain a child under age 18, which is a required eligibility criterion for participation in the program. Questioned costs – Known and likely questioned costs did not exceed the reportable threshold under 2 CFR 200.516. Cause – Management indicated that the eligibility determination error resulted from inadequate review of information contained in the participant’s application compared to the online database used to track eligibility during the intake and approval process, causing an ineligible household to be approved for benefits. Effect or potential effect – Failure to properly determine participant eligibility increases the risk that TANF funds will be provided to ineligible recipients, resulting in noncompliance with program requirements and the potential misuse of federal funds. Context – One sampled beneficiary was determined to be ineligible under applicable program requirements. Our sample of beneficiaries was a statistically valid sample. Recommendation – We recommend management strengthen its review procedures over eligibility determinations to ensure all required eligibility criteria are verified and documented before benefits are approved. Management should also consider performing periodic supervisory reviews of approved applications and determine whether recovery of the improperly disbursed funds is appropriate under program requirements. Views of responsible officials – Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Audit Findings.

Finding 2025-003: Reporting – Temporary Assistance for Needy Families Federal Program: Temporary Assistance for Needy Families Assistance Listing No.: 93.558 Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Maine State Department of Health and Human Services Federal Award Identification Number: OFI-23-201/OFI-25-201 Repeat Finding: This is a repeat finding Repeat Finding Number: 2024-003 Criteria – MaineHousing is required to submit certain monthly and annual reports to the State of Maine Department of Health and Human Services as part of its administration of the TANF program. Condition – During 2025, MaineHousing did not file its Monthly Financial Reports, Monthly Household Reports, annual Program Projections Report, or the Program Delivery Report on a timely basis. Questioned costs – None. Cause – Turnover within the TANF department delayed the review and submission of the reports noted above. Effect or potential effect – Reports are not submitted in accordance with federal or state guidelines and amounts within the reports may be inaccurate. Context – MaineHousing did not file its Monthly Financial Reports, Monthly Household Reports, Annual Program Projections Report or the Program Delivery Report on a timely basis. Our sample of reports was a statistically valid sample. Recommendation – MaineHousing should enhance controls over the tracking, completion and review of TANF reporting to ensure that due dates are monitored and adhered to. Views of responsible officials – Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Audit Findings.