Audit 411729

Finding 2025-002: Significant Deficiency – Internal Control and Compliance of Eligibility - Waiting List Selections Federal Program: Section 8 Project-Based Cluster – Project Based Rental Assistance (PBRA) Federal Agency: U.S. Department of Housing and Urban Development Pass Through Entity: Wisconsin Housing and Economic Development Authority Program Assistance Listing Number: 14.195 Criteria: According to 24 CFR sections 880.603, 881.601, 882.514, 882.808(b)(2), 883.701, 884.214 and 886 subparts A and C, the Housing Authority must select participants from the waiting list as outlined within their admission policies in its administrative plan and maintain documentation which shows that, at the time of admission, the participant met the preference criteria that determined the participant's place on the waiting list. Condition: The Housing Authority did not maintain documentation showing how preference criteria determined the participant's place on the waiting list. Cause: The Housing Authority was not aware of the requirement to retain documentation supporting how preference criteria were documented and considered. Effect: Without appropriate admission policies in place or documentation supporting a participant's place on the waiting list, there is the potential for participants to be admitted ahead of others who would be placed higher on the waiting list. Context: Of the twenty-eight participants included in the move-in report for 2025, five were selected for testing. Four selections were on the previous month's waiting list report, and one was an internal transfer between units due to extenuating circumstances. The Authority did not retain documentation supporting their conclusions noting preference criteria or rationale for admission. The sample was not a statically valid sample. Questioned Costs: None identified. Recommendation: We recommend the Housing Authority implement a system for documenting the method used to determine whether each participant met the preference criteria at the time of admission in accordance with their administrative plan and policies. If the appropriate policies are not already in place, the Housing Authority should implement them according to the relevant 24 CFR sections. Views of Responsible Officials: The responsible officials acknowledge this finding is accurate. Staff turnover resulted in the inability to locate documentation showing how preference criteria determined the applicant's place on the waiting list. The Housing Authority has purged the waiting list to obtain updated information from applicants. The Housing Authority is now utilizing its wait list management software to apply preference points (if applicable) to each applicant on the waiting list per the tenant selection policy.