Finding 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance – E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness 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 member 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 four hundred ninety seven (497) Section 8 Housing Choice Vouchers' units. Of a sample of eighteen (18) tenant files, the following information was unavailable for examination at the time of audit: Consent to release information form was missing in one (1) file Verification of income was missing in two (2) files Executed Tenancy Addendum was missing in two (2) files Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: As a result of the Authority's failure to properly design, implement, maintain, and monitor internal controls over tenant eligibility determinations and file maintenance, there is an increased risk that ineligible participants may be admitted to or retained in the program, eligible participants may receive incorrect assistance, and instances of noncompliance may not be detected or corrected in a timely manner. Consequently, federal funds may be expended for unsupported or ineligible purposes, resulting in potential questioned costs and noncompliance with HUD requirements. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Finding 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.871 Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually 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)). These inspection reports are required to be maintained and available for examination at the time of audit. For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that failed inspections and did not pass reinspection within 30 days without penalty. Context: There are approximately three hundred eighty five (385) units with failed inspections. Of a sample size of twenty five (25) failed inspections, three (3) units did not pass reinspection within 30 days. Housing assistance payments were not abated nor was the tenant relocated. Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed annual HQS inspections in compliance with program requirements. Effect: The Authority's failure to ensure timely correction of HQS deficiencies and enforce required abatement procedures increases the risk that federal funds were used to provide housing assistance for units that did not meet HUD Housing Quality Standards. As a result, the Authority cannot demonstrate that assisted units complied with program requirements during the period of noncompliance. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance related to HQS inspections in accordance with the Uniform Guidance and the compliance supplement.