Finding 2025-002 Significant Deficiency: Reporting - Compliance and Control Finding ALN 14.871 and 14.879 - Housing Voucher Cluster: Section 8 Housing Choice Vouchers Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: N/A - Direct Award Criteria Or Specific Requirement: HUD requires Public Housing Authorities (PHAs) to submit Form HUD-50058 within 60 days whenever a family ends participation in the program, moves out of the PHA’s jurisdiction under portability, or transfers from one assisted unit to another (unit-to-unit move). The form must be submitted within 60 days of the participant’s termination, exit from the program, or unit transfer. Condition: The Authority did not submit the required form within the designated timeframe, nor did the existing control operate as intended to prevent the error from occurring. Cause: The control in place did not ensure timely submission of the HUD-50058. Effect: The possibility exists that noncompliance with federal requirements could go undetected regarding compliance relating to direct and material compliance requirements. Questioned Costs: None. Context: Of the 40 participants tested, 4 participants that exited the program or moved units did not have the HUD-50058 submitted within the required 60 day timeframe. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management evaluate their existing control over the timely submission of the HUD-50058 upon a participant’s exit of the program, and consider implementing additional controls such as a review of a schedule of participants who exited the program monthly to ensure all required submissions to HUD take place on time. Views Of Responsible Officials: Section 8 Housing Choice Voucher Program staff will conduct a monthly review of participant exits, portability actions, and unit transfers as a standing agenda item during regular operational meetings to ensure all required HUD-50058 submissions are completed within HUD’s required 60-day timeframe. Any outstanding submissions identified through the review will be addressed promptly and documented by responsible program staff.
Finding 2025-003 Significant Deficiency: Special Tests And Provisions - Compliance and Control Finding ALN 14.871 and 14.879 - Housing Voucher Cluster: Section 8 Housing Choice Vouchers Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: N/A - Direct Award Criteria Or Specific Requirement: HUD requires PHAs to place tenant-occupied units into abatement when cited HQS deficiencies are not corrected within the required timeframe and the unit does not receive a passing score upon reinspection. Condition: The Authority failed to place applicable units into abatement, and existing controls did not ensure that units requiring abatement were identified and processed in a timely manner. Cause: The control in place did not ensure timely abatement of rent as a result of failed inspection corrections. Effect: The possibility exists that noncompliance with federal requirements could go undetected regarding compliance relating to direct and material compliance requirements. Questioned Costs: Known questioned costs of $8,805 were identified. Due to the nature of the compliance deficiency, likely questioned costs could not be reasonably projected or estimated, however are likely to exceed $25,000. Context: Of the 40 units tested, 7 met the criteria for abatement but were not placed into abatement. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management evaluate its existing controls over the identification and processing of units subject to HQS abatement requirements and consider implementing additional controls, such as a monthly review of failed HQS reinspections and outstanding deficiencies, to ensure units meeting HUD's abatement criteria are identified and placed into abatement in a timely manner. Views Of Responsible Officials: Section 8 Housing Choice Voucher Program staff will conduct a monthly review of failed HQS re-inspections and outstanding deficiencies as a standing agenda item during regular operational meetings to ensure units meeting HUD’s abatement requirements are identified and placed into abatement timely. Any required abatements identified through the review will be addressed promptly and documented by responsible program staff.
Finding 2025-004 Significant Deficiency: Eligibility – Compliance and Control Finding ALN 14.871 and 14.879 - Housing Voucher Cluster: Section 8 Housing Choice Vouchers Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: N/A - Direct Award Criteria Or Specific Requirement: HUD allows PHAs to reduce voucher payment standards; however, the reduced standard generally may be applied immediately only to new admissions, families that move, and families with qualifying changes in family size or composition. Existing participants are generally not subject to the reduced standard until their second regular reexamination following the decrease. Condition: The Authority applied the reduced (100 percent FMR-based) payment standard to existing participant households based on interim reexaminations resulting from rent increases and/or changes in income, rather than waiting until the appropriate reexamination date. Cause: The existing controls were not sufficient to identify instances in which the reduced payment standard was improperly applied to existing participant households during interim reexaminations. Effect: The possibility exists that noncompliance with federal requirements could go undetected regarding compliance relating to direct and material compliance requirements. Questioned Costs: Known questioned costs of $153,078 were identified. Context: The Authority was notified by HUD of the condition and performed an internal inspection of 342 files. Of the tested files, 338 files required recalculations of HAP rent assistance. The issue was not detected by existing controls designed to ensure compliance with HUD requirements. Identification As A Repeat Finding: Not applicable. Recommendation: Management should continue providing training and guidance to staff on HUD regulations and Administrative Plan requirements, while reinforcing the circumstances under which reduced payment standards may be applied to participant households and ensuring appropriate supervisory review. Staff should consistently follow applicable HUD requirements, documented guidance, and the Administrative Plan when determining and applying payment standards. Views Of Responsible Officials: Management will continue to provide and support ongoing training and guidance to HCV staff on HUD regulations and Administrative Plan requirements governing payment standards. As part of these corrective actions, HCV leadership has completed additional executive-level management training. Any future change in payment standards will be reviewed with staff before implementation, and its application to existing participant households will be subject to documented supervisory review to ensure the change is applied in accordance with HUD requirements, written guidance, and the Administrative Plan.