Audit 52339

Reference Number: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to the following: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. ?200.303 Internal controls (2 CFR 200.303): The non-Federal entity must - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart A ? Applicability, Definitions, Equal Opportunity Requirements ? Section 960.201 ? Eligibility: (1) Basic eligibility. An applicant must meet all eligibility requirements in order to receive housing assistance. At a minimum, the applicant must be a family, and must be income-eligible, as described in this section. Such eligible applicants include single persons. (2) Low income limit. No family other than a low income family is eligible for admission to a Public Housing Authority's (PHA) public housing program. Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart C ? Rent and Reexamination ? Sections 960.257 and 960.259 ? Family information and verification: (1) For families who pay an income-based rent, the PHA must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. The PHA must obtain and document in the family file third-party verification of the following factors, or must document in the file why third-party verification was not available: (1) Reported family annual income; (2) The value of assets; (3) Expenses related to deductions from annual income; and (4) Other factors that affect the determination of adjusted income or income-based rent. Condition and Context During our testing of the eligibility compliance requirements for the Moving to Work (MTW) Demonstration Program (Section 8 Housing Choice Vouchers (HCV) and Low Rent Public Housing (LRPH) programs), we selected tenants from a population of 13,107 HCV tenant cases and 1,454 LRPH tenant cases and identified the following exceptions: HCV (a total of 40 tenant cases selected for testing): ? In four cases, required documentation to establish initial eligibility was missing from the files. The missing documents include copies of social security numbers and evidence of citizenship or eligible immigration status. LRPH (a total of 40 tenant cases selected for testing): ? In nine cases, annual reexaminations that were due were not performed within the required timeframe. ? In four cases, third party evidence supporting the verification of income was missing from the file. ? For nine cases, various documents were missing from the file as evidence to support the initial and recertification of eligibility, including background documents and income Authorization for Release Forms. Cause We noted that the Authority did not have adequate resources assigned to ensure that applicant?s eligibility was properly reviewed and approved prior to acceptance and/or continuance in the Moving to Work Demonstration Program. Effect When the necessary oversight and monitoring of eligibility determinations or recertification is insufficient, the Authority has an increase risk of ineligible participation in the program and individuals receiving improper benefits. Questioned Costs Questioned costs were not identified as the tenants were deemed eligible for the HCV and LRPH programs. Recommendation The Authority should adhere and monitor compliance with its policies to ensure staff and secondary reviews of eligibility applications are performed, while following established guidelines and retaining acceptable documentation to support the eligibility determinations and subsequent recertification. Views of Responsible Officials and Corrective Action Plan Management's response is reported in "Management's Response and Corrective Action Plan" included in a separate section at the end of this report.

Reference Number: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to the following: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. ?200.303 Internal controls (2 CFR 200.303): The non-Federal entity must - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart A ? Applicability, Definitions, Equal Opportunity Requirements ? Section 960.201 ? Eligibility: (1) Basic eligibility. An applicant must meet all eligibility requirements in order to receive housing assistance. At a minimum, the applicant must be a family, and must be income-eligible, as described in this section. Such eligible applicants include single persons. (2) Low income limit. No family other than a low income family is eligible for admission to a Public Housing Authority's (PHA) public housing program. Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart C ? Rent and Reexamination ? Sections 960.257 and 960.259 ? Family information and verification: (1) For families who pay an income-based rent, the PHA must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. The PHA must obtain and document in the family file third-party verification of the following factors, or must document in the file why third-party verification was not available: (1) Reported family annual income; (2) The value of assets; (3) Expenses related to deductions from annual income; and (4) Other factors that affect the determination of adjusted income or income-based rent. Condition and Context During our testing of the eligibility compliance requirements for the Moving to Work (MTW) Demonstration Program (Section 8 Housing Choice Vouchers (HCV) and Low Rent Public Housing (LRPH) programs), we selected tenants from a population of 13,107 HCV tenant cases and 1,454 LRPH tenant cases and identified the following exceptions: HCV (a total of 40 tenant cases selected for testing): ? In four cases, required documentation to establish initial eligibility was missing from the files. The missing documents include copies of social security numbers and evidence of citizenship or eligible immigration status. LRPH (a total of 40 tenant cases selected for testing): ? In nine cases, annual reexaminations that were due were not performed within the required timeframe. ? In four cases, third party evidence supporting the verification of income was missing from the file. ? For nine cases, various documents were missing from the file as evidence to support the initial and recertification of eligibility, including background documents and income Authorization for Release Forms. Cause We noted that the Authority did not have adequate resources assigned to ensure that applicant?s eligibility was properly reviewed and approved prior to acceptance and/or continuance in the Moving to Work Demonstration Program. Effect When the necessary oversight and monitoring of eligibility determinations or recertification is insufficient, the Authority has an increase risk of ineligible participation in the program and individuals receiving improper benefits. Questioned Costs Questioned costs were not identified as the tenants were deemed eligible for the HCV and LRPH programs. Recommendation The Authority should adhere and monitor compliance with its policies to ensure staff and secondary reviews of eligibility applications are performed, while following established guidelines and retaining acceptable documentation to support the eligibility determinations and subsequent recertification. Views of Responsible Officials and Corrective Action Plan Management's response is reported in "Management's Response and Corrective Action Plan" included in a separate section at the end of this report.

Reference Number: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to the following: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. ?200.303 Internal controls (2 CFR 200.303): The non-Federal entity must - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart A ? Applicability, Definitions, Equal Opportunity Requirements ? Section 960.201 ? Eligibility: (1) Basic eligibility. An applicant must meet all eligibility requirements in order to receive housing assistance. At a minimum, the applicant must be a family, and must be income-eligible, as described in this section. Such eligible applicants include single persons. (2) Low income limit. No family other than a low income family is eligible for admission to a Public Housing Authority's (PHA) public housing program. Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart C ? Rent and Reexamination ? Sections 960.257 and 960.259 ? Family information and verification: (1) For families who pay an income-based rent, the PHA must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. The PHA must obtain and document in the family file third-party verification of the following factors, or must document in the file why third-party verification was not available: (1) Reported family annual income; (2) The value of assets; (3) Expenses related to deductions from annual income; and (4) Other factors that affect the determination of adjusted income or income-based rent. Condition and Context During our testing of the eligibility compliance requirements for the Moving to Work (MTW) Demonstration Program (Section 8 Housing Choice Vouchers (HCV) and Low Rent Public Housing (LRPH) programs), we selected tenants from a population of 13,107 HCV tenant cases and 1,454 LRPH tenant cases and identified the following exceptions: HCV (a total of 40 tenant cases selected for testing): ? In four cases, required documentation to establish initial eligibility was missing from the files. The missing documents include copies of social security numbers and evidence of citizenship or eligible immigration status. LRPH (a total of 40 tenant cases selected for testing): ? In nine cases, annual reexaminations that were due were not performed within the required timeframe. ? In four cases, third party evidence supporting the verification of income was missing from the file. ? For nine cases, various documents were missing from the file as evidence to support the initial and recertification of eligibility, including background documents and income Authorization for Release Forms. Cause We noted that the Authority did not have adequate resources assigned to ensure that applicant?s eligibility was properly reviewed and approved prior to acceptance and/or continuance in the Moving to Work Demonstration Program. Effect When the necessary oversight and monitoring of eligibility determinations or recertification is insufficient, the Authority has an increase risk of ineligible participation in the program and individuals receiving improper benefits. Questioned Costs Questioned costs were not identified as the tenants were deemed eligible for the HCV and LRPH programs. Recommendation The Authority should adhere and monitor compliance with its policies to ensure staff and secondary reviews of eligibility applications are performed, while following established guidelines and retaining acceptable documentation to support the eligibility determinations and subsequent recertification. Views of Responsible Officials and Corrective Action Plan Management's response is reported in "Management's Response and Corrective Action Plan" included in a separate section at the end of this report.

Reference Number: 2022-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Material Weakness in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to the following: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. ?200.303 Internal controls (2 CFR 200.303): The non-Federal entity must - Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart A ? Applicability, Definitions, Equal Opportunity Requirements ? Section 960.201 ? Eligibility: (1) Basic eligibility. An applicant must meet all eligibility requirements in order to receive housing assistance. At a minimum, the applicant must be a family, and must be income-eligible, as described in this section. Such eligible applicants include single persons. (2) Low income limit. No family other than a low income family is eligible for admission to a Public Housing Authority's (PHA) public housing program. Title 24 ? Housing and Urban Development. Subtitle B - Chapter IX ? Admission to, and Occupancy of, Public Housing. Subpart C ? Rent and Reexamination ? Sections 960.257 and 960.259 ? Family information and verification: (1) For families who pay an income-based rent, the PHA must conduct a reexamination of family income and composition at least annually and must make appropriate adjustments in the rent after consultation with the family and upon verification of the information. The PHA must obtain and document in the family file third-party verification of the following factors, or must document in the file why third-party verification was not available: (1) Reported family annual income; (2) The value of assets; (3) Expenses related to deductions from annual income; and (4) Other factors that affect the determination of adjusted income or income-based rent. Condition and Context During our testing of the eligibility compliance requirements for the Moving to Work (MTW) Demonstration Program (Section 8 Housing Choice Vouchers (HCV) and Low Rent Public Housing (LRPH) programs), we selected tenants from a population of 13,107 HCV tenant cases and 1,454 LRPH tenant cases and identified the following exceptions: HCV (a total of 40 tenant cases selected for testing): ? In four cases, required documentation to establish initial eligibility was missing from the files. The missing documents include copies of social security numbers and evidence of citizenship or eligible immigration status. LRPH (a total of 40 tenant cases selected for testing): ? In nine cases, annual reexaminations that were due were not performed within the required timeframe. ? In four cases, third party evidence supporting the verification of income was missing from the file. ? For nine cases, various documents were missing from the file as evidence to support the initial and recertification of eligibility, including background documents and income Authorization for Release Forms. Cause We noted that the Authority did not have adequate resources assigned to ensure that applicant?s eligibility was properly reviewed and approved prior to acceptance and/or continuance in the Moving to Work Demonstration Program. Effect When the necessary oversight and monitoring of eligibility determinations or recertification is insufficient, the Authority has an increase risk of ineligible participation in the program and individuals receiving improper benefits. Questioned Costs Questioned costs were not identified as the tenants were deemed eligible for the HCV and LRPH programs. Recommendation The Authority should adhere and monitor compliance with its policies to ensure staff and secondary reviews of eligibility applications are performed, while following established guidelines and retaining acceptable documentation to support the eligibility determinations and subsequent recertification. Views of Responsible Officials and Corrective Action Plan Management's response is reported in "Management's Response and Corrective Action Plan" included in a separate section at the end of this report.