2022-001 ? SPECIAL TESTS AND PROVISIONS: SELECTION FROM THE WAITING LIST Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 ? Housing Voucher Cluster CRITERIA The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207). CONDITION As a result of our audit procedures, we noted 2 instances in which the Authority could not provide waiting list documentation for two new admissions. As a result, we could not confirm whether those new admissions were housed in accordance with the Authority?s policy. CAUSE The Authority?s system of internal controls over the participant admission process was not sufficient to meet the Authority?s new admission selection policies. EFFECT New participants admitted to the program may not have been properly selected from the waiting list in accordance with the Authority?s applicant selection policies. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 3 from a population of 22 new admissions. This was not a statistically valid sample. REPEAT FINDING This is not a repeat finding. RECOMMENDATION We recommend that the Authority develop and implement a new admission checklist to ensure all new participants are admitted to the program in accordance with the Authority?s policies. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-002 ? ELIGIBILITY: RENT CALCULATION Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 ? Housing Voucher Cluster CRITERIA In accordance with 24 CFR ?5.609, total tenant payment is based on a participant family?s annual income. Annual income means all amounts, monetary or not, that go to or are on behalf of family members, or all amounts anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date that are not specifically excluded by regulation. A provision of 24 CFR ?5.611 includes the adjustments to annual income that must be provided; whereas provisions at ?982.516 explain the requirement for verifying data used to calculate expenses related to deductions and exclusions from annual income. Finally, 24 CFR ?5.233 mandates the use of HUD's Enterprise Income Verification (EIV) System for assistance with income determination. CONDITION HUD, Office of Public Housing Voucher Programs (OHVP) Quality Assurance Division (QAD), conducted a Calculation of Housing Assistance Payments (HAP), Adjusted Income, and Rent (CHAIR) review of the Amesbury Housing Authority?s (AHA) Housing Choice Voucher (HCV) Programs on May 18, 2022. The CHAIR review included a recalculation and comparison of participant family HAP, rent, and utility reimbursement amounts between January 1, 2021, through December 31, 2021. HUD QAD also reviewed the AHA?s HCV Administrative Plan, Payment and Occupancy Standards, and Utility Allowance Schedules. In addition, discussions with AHA staff were held regarding operational processes. HUD QAD?s objectives were to determine whether AHA is properly calculating HAP and participant rent. HUD QAD had noted the following: ? The AHA is not always calculating annual and adjusted income accurately by not including all sources of income, using net rather than gross (Social Security) income, medical receipt discrepancies or omissions, not following up on the EIV/IVT Income Discrepancy reports, and through general calculation errors. ? The AHA did not calculate annual and adjusted income correctly in six (6) out of the seven (7) tenant files reviewed. This determination is based on the observance of mathematical errors to annualize the income as well as missing documentation for medical expense deductions where the documentation was not complete or was unable able to be validated. ? The AHA was not able to provide required documentation in six (6) of the seven (7) files reviewed. Tenant files had multiple missing required documentation which included Request for Tenancy, Lease, HAP Contracts, medical receipts, vouchers, and Enterprise Income Verification (EIV) and the Income Validation Tool (IVT) reports. There were instances where the AHA provided some but not all the required documents listed above. There are instances where utility allowances could not be validated due to lack of corroborative documentation. The AHA was made aware of these deficiencies from another recent audit/review. The AHA lacks quality control procedures that would eliminate these errors. CAUSE According to HUD QAD, a PHA that experiences errors of this nature are an indication that staff may not have a clear understanding of program requirements. Further, AHA has not implemented quality control procedures to identify errors and correct them before they result in miscalculation and over/under payment of Housing Assistance Payments. Additionally, the AHA does not have procedures in place to resolve discrepancies in income detected by the EIV system. In addition, HUD QAD states that missing documents often occurs when a second file for a family is established, and the original documents were not transferred to the new file. This could also be the case when a PHA converts to a paperless file system where documents are scanned and then destroyed. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, the reasonable opportunity to prevent, detect, or correct impairments to effectiveness or efficiency of operations and can be indicative of a need for increased quality control and staff training. A summary chart of missing documentation was provided to AHA under separate cover to preserve and protect any Personally Identifiable Information (PII). EFFECT HUD QAD states that not calculating annual and adjusted income properly can result in over or under payment of Housing Assistance Payments (HAP). Disallowed costs for over payment of subsidy must be repaid to Restricted Net Position (RNP) from Administrative Fees or other non-Federal funds. HUD QAD also states that lack of verification of familial status, Social Security Numbers, and citizenship could result in over and/or under payment of HAP. Without an executed HAP contract in place, housing assistance payments cannot be made. Any payments made absent an executed contract are considered disallowed costs. Disallowed costs for over payment of subsidy must be repaid in accordance with HUD requirements, and all information forwarded to the Debt Collection POC who will provide further direction on repayment procedures. QUESTIONED COSTS None noted. CONTEXT HUD QAD selected a sample of 7 from a population of 112. This was not a statistically valid sample. REPEAT FINDING This is not a repeat finding. RECOMMENDATION HUD QAD has made following recommendations/corrective actions: ? This finding is a systemic deficiency, and a review of all tenant files is required to ensure that income is accurately calculated. If the systemic deficiency cannot be corrected within 30 days from CHAIR Review letter, a corrective action plan (CAP) detailing how the AHA plans to correct the error and the expected completion date needs to be provided to HUD QAD. Disallowed costs due to overpayment of subsidy should be recalculated and renegotiated upon completion of the CAP. ? The AHA must develop quality control procedures and a method to determine the effectiveness of the procedures for calculating income. The methodology shall measure the degree to which performance has improved (accurate calculations) and provide accountability by each case worker and their supervisors. Further, the AHA must develop a monthly voucher program report that provides the status of the voucher program to the Executive Director and Board of Commissioners. It shall include information on the accuracy of income calculations. Finally, the AHA must provide training to all employees on the new processes and procedures. ? The AHA must provide the required documentation within thirty (30) days from CHAIR Review letter. If AHA fails to provide these documents by the deadline, additional disallowed costs will be assessed. ? The AHA must develop and implement quality control procedures and a method to determine the effectiveness of the procedures for maintaining required documentation within tenant files. The methodology should measure the degree to which performance has improved (proper documentation) and provide accountability by each case worker and their supervisors. Copies of these policy changes and the associated Board of Commissioners resolutions approving those policies must be provided to the QAD and the Boston Field Office no later than thirty (30) days from CHAIR Review letter. ? The AHA must develop a monthly voucher program report that provides the status of the voucher program to the Executive Director and Board of Commissioners. It must include information on the quality of file documentation. Copies of these reports must be provided to the QAD (within the CAP) and the Boston Field Office for a minimum of three (3) months following CHAIR Review letter and the reports must be included in the Board of Commissioners packet for each meeting. As a reminder, all Personally Identifiable Information must be redacted from these reports prior to making them publicly available. ? The AHA must procure and carry out appropriate training for all staff engaged in determining rent and HAP. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-001 ? SPECIAL TESTS AND PROVISIONS: SELECTION FROM THE WAITING LIST Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 ? Housing Voucher Cluster CRITERIA The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207). CONDITION As a result of our audit procedures, we noted 2 instances in which the Authority could not provide waiting list documentation for two new admissions. As a result, we could not confirm whether those new admissions were housed in accordance with the Authority?s policy. CAUSE The Authority?s system of internal controls over the participant admission process was not sufficient to meet the Authority?s new admission selection policies. EFFECT New participants admitted to the program may not have been properly selected from the waiting list in accordance with the Authority?s applicant selection policies. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 3 from a population of 22 new admissions. This was not a statistically valid sample. REPEAT FINDING This is not a repeat finding. RECOMMENDATION We recommend that the Authority develop and implement a new admission checklist to ensure all new participants are admitted to the program in accordance with the Authority?s policies. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-002 ? ELIGIBILITY: RENT CALCULATION Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 ? Housing Voucher Cluster CRITERIA In accordance with 24 CFR ?5.609, total tenant payment is based on a participant family?s annual income. Annual income means all amounts, monetary or not, that go to or are on behalf of family members, or all amounts anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date that are not specifically excluded by regulation. A provision of 24 CFR ?5.611 includes the adjustments to annual income that must be provided; whereas provisions at ?982.516 explain the requirement for verifying data used to calculate expenses related to deductions and exclusions from annual income. Finally, 24 CFR ?5.233 mandates the use of HUD's Enterprise Income Verification (EIV) System for assistance with income determination. CONDITION HUD, Office of Public Housing Voucher Programs (OHVP) Quality Assurance Division (QAD), conducted a Calculation of Housing Assistance Payments (HAP), Adjusted Income, and Rent (CHAIR) review of the Amesbury Housing Authority?s (AHA) Housing Choice Voucher (HCV) Programs on May 18, 2022. The CHAIR review included a recalculation and comparison of participant family HAP, rent, and utility reimbursement amounts between January 1, 2021, through December 31, 2021. HUD QAD also reviewed the AHA?s HCV Administrative Plan, Payment and Occupancy Standards, and Utility Allowance Schedules. In addition, discussions with AHA staff were held regarding operational processes. HUD QAD?s objectives were to determine whether AHA is properly calculating HAP and participant rent. HUD QAD had noted the following: ? The AHA is not always calculating annual and adjusted income accurately by not including all sources of income, using net rather than gross (Social Security) income, medical receipt discrepancies or omissions, not following up on the EIV/IVT Income Discrepancy reports, and through general calculation errors. ? The AHA did not calculate annual and adjusted income correctly in six (6) out of the seven (7) tenant files reviewed. This determination is based on the observance of mathematical errors to annualize the income as well as missing documentation for medical expense deductions where the documentation was not complete or was unable able to be validated. ? The AHA was not able to provide required documentation in six (6) of the seven (7) files reviewed. Tenant files had multiple missing required documentation which included Request for Tenancy, Lease, HAP Contracts, medical receipts, vouchers, and Enterprise Income Verification (EIV) and the Income Validation Tool (IVT) reports. There were instances where the AHA provided some but not all the required documents listed above. There are instances where utility allowances could not be validated due to lack of corroborative documentation. The AHA was made aware of these deficiencies from another recent audit/review. The AHA lacks quality control procedures that would eliminate these errors. CAUSE According to HUD QAD, a PHA that experiences errors of this nature are an indication that staff may not have a clear understanding of program requirements. Further, AHA has not implemented quality control procedures to identify errors and correct them before they result in miscalculation and over/under payment of Housing Assistance Payments. Additionally, the AHA does not have procedures in place to resolve discrepancies in income detected by the EIV system. In addition, HUD QAD states that missing documents often occurs when a second file for a family is established, and the original documents were not transferred to the new file. This could also be the case when a PHA converts to a paperless file system where documents are scanned and then destroyed. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, the reasonable opportunity to prevent, detect, or correct impairments to effectiveness or efficiency of operations and can be indicative of a need for increased quality control and staff training. A summary chart of missing documentation was provided to AHA under separate cover to preserve and protect any Personally Identifiable Information (PII). EFFECT HUD QAD states that not calculating annual and adjusted income properly can result in over or under payment of Housing Assistance Payments (HAP). Disallowed costs for over payment of subsidy must be repaid to Restricted Net Position (RNP) from Administrative Fees or other non-Federal funds. HUD QAD also states that lack of verification of familial status, Social Security Numbers, and citizenship could result in over and/or under payment of HAP. Without an executed HAP contract in place, housing assistance payments cannot be made. Any payments made absent an executed contract are considered disallowed costs. Disallowed costs for over payment of subsidy must be repaid in accordance with HUD requirements, and all information forwarded to the Debt Collection POC who will provide further direction on repayment procedures. QUESTIONED COSTS None noted. CONTEXT HUD QAD selected a sample of 7 from a population of 112. This was not a statistically valid sample. REPEAT FINDING This is not a repeat finding. RECOMMENDATION HUD QAD has made following recommendations/corrective actions: ? This finding is a systemic deficiency, and a review of all tenant files is required to ensure that income is accurately calculated. If the systemic deficiency cannot be corrected within 30 days from CHAIR Review letter, a corrective action plan (CAP) detailing how the AHA plans to correct the error and the expected completion date needs to be provided to HUD QAD. Disallowed costs due to overpayment of subsidy should be recalculated and renegotiated upon completion of the CAP. ? The AHA must develop quality control procedures and a method to determine the effectiveness of the procedures for calculating income. The methodology shall measure the degree to which performance has improved (accurate calculations) and provide accountability by each case worker and their supervisors. Further, the AHA must develop a monthly voucher program report that provides the status of the voucher program to the Executive Director and Board of Commissioners. It shall include information on the accuracy of income calculations. Finally, the AHA must provide training to all employees on the new processes and procedures. ? The AHA must provide the required documentation within thirty (30) days from CHAIR Review letter. If AHA fails to provide these documents by the deadline, additional disallowed costs will be assessed. ? The AHA must develop and implement quality control procedures and a method to determine the effectiveness of the procedures for maintaining required documentation within tenant files. The methodology should measure the degree to which performance has improved (proper documentation) and provide accountability by each case worker and their supervisors. Copies of these policy changes and the associated Board of Commissioners resolutions approving those policies must be provided to the QAD and the Boston Field Office no later than thirty (30) days from CHAIR Review letter. ? The AHA must develop a monthly voucher program report that provides the status of the voucher program to the Executive Director and Board of Commissioners. It must include information on the quality of file documentation. Copies of these reports must be provided to the QAD (within the CAP) and the Boston Field Office for a minimum of three (3) months following CHAIR Review letter and the reports must be included in the Board of Commissioners packet for each meeting. As a reminder, all Personally Identifiable Information must be redacted from these reports prior to making them publicly available. ? The AHA must procure and carry out appropriate training for all staff engaged in determining rent and HAP. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.