Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Assistance Listing Numbers: 14.871 & 14.879 Non Compliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 6,490 units. Of a sample size of fifty-six (56) tenant files, the following was noted: HUD form 9886 was unable to be provided in 9 files Citizen Declaration Section 214 form was unable to be provided in 7 files Verification of income was unable to be provided in 1 file Lead based paint form was unable to be provided in 1 file. Known Questioned Costs: $15,432* * Represents HAP attributable to one (1) tenant file for which the Authority could not demonstrate compliance with eligibility requirements. The questioned costs do not represent amounts determined to be ineligible but rather costs associated with the tenant that remained in noncompliance beyond the required recertification date. Cause: There is a significant deficiency in internal controls over the eligibility type of compliance related to the maintenance of tenant files in the Housing Voucher Cluster. The Authority has not maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Authority is in non-compliance with the eligibility requirements of the Housing Voucher Cluster programs. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.
Finding 2025-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Catalog Numbers: 14.871 & 14.879 Noncompliance – N. Special Tests and Provisions - Housing Assistance Payment Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: PHAs must pay monthly HAP in amounts that agree to Line 12u of the HUD-50058 and are accurately reflected in the HAP contract and HAP register (24 CFR § 982.158 and 24 CFR Part 982, Subpart K). PHAs must adopt and maintain a payment standard schedule establishing voucher payment standards by bedroom size within the PHA’s jurisdiction (24 CFR § 982.505). Payment standards must generally be set within 90 percent to 110 percent of HUD-published Fair Market Rents (FMRs) or Small Area FMRs, as applicable, without HUD approval (24 CFR § 982.503(d)). PHAs are required to review payment standards annually and revise the schedule, as necessary, no later than three months following the effective date of new FMRs to remain within the basic range (24 CFR § 982.503(c)(3)). For new HAP contracts, the payment standard in effect at the time of HAP execution must be used. For existing HAP contracts, increases in payment standards must be applied no later than the earliest of a rent increase affecting the family share, the family’s next regular or interim reexamination, or one year after the effective date of the payment standard increase, unless applied earlier in accordance with the PHA’s Administrative Plan (24 CFR § 982.505(c)(4)). Condition: Based upon inspection of the Authority’s files and on discussion with management, it was determined the Authority applied incorrect payment standard amounts in calculating HAP. As a result, the HAP reported on Line 12u of the HUD-50058 were calculated using payment standards that were not applicable to the households at the time the HAP amounts were determined. Context: Of a sample size of fifty-six (56) tenant files, one (1) tenants' HAP reported on Line 12u of the HUD-50058s were calculated using payment standards that were not applicable to the households at the time of recertification. Our sample size is statistically valid. Known Questioned Costs: $908* * Represents HAP attributable to one (1) tenant file for which the Authority could not demonstrate compliance with housing assistance payment requirements. The questioned costs do not represent amounts determined to be ineligible but rather costs associated with the tenant that remained in noncompliance beyond the required recertification date. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to housing assistance payments. The Authority has not maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster program is in non-compliance with the special tests and provisions compliance requirement related to the payment standards of housing assistance payments. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Housing Voucher Cluster program to ensure that established internal control policies are being followed on a timely basis.
Finding 2025-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Projects Assistance Listing Numbers: 14.155 Non Compliance: H – Unauthorized distributions of project assets Non Compliance Material to the Financial Statements: No Significant deficiency in Internal Control over Compliance for Allowable Activities Criteria: The Authority must receive HUD approval prior to making distributions to related party except for distributions made with surplus cash. Condition: Based on review of the distributions made by the Authority, there were distributions made that were not authorized by HUD and were greater than the surplus cash balance calculated. Context: During 2025, the Authority made distributions to a related party in the amount of $82,797 without HUD approval. Known Questioned Costs: $82,797* 2024 Surplus Cash = $148,203 (Less) 2025 Distributions = $181,000 (Less) 2025 Advances to partners = $50,000 Total Known Questioned Costs = $82,797. Cause: Controls and actions were not taken to ensure that HUD approval is obtained prior to making distributions to related parties. Effect: The Authority is in non-compliance with specific requirements of a major federal program. Recommendation: Management should establish internal controls and procedures to ensure that HUD approval is obtained prior to making distributions to related parties. Authority response: Management will ensure that HUD approval is obtained prior to making distributions to related parties.