Reference Number: 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Cluster
Federal Catalog Number: 14.871 and 14.879
Federal Grant Number: Not Applicable
Category of Finding: Eligibility
Classification of Finding: Material Weakness in In...
Reference Number: 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Cluster
Federal Catalog Number: 14.871 and 14.879
Federal Grant Number: Not Applicable
Category of Finding: Eligibility
Classification of Finding: Material Weakness in Internal Control over Compliance
Material Noncompliance
Authority’s Response & Actions Taken
The Authority has made considerable progress in addressing the backlog of annual re-examinations that resulted from the transition of a third-party contractor to new third-party contractors to administer its Project-Based and Tenant-Based Voucher Programs. The material weakness was further exasperated by tenants not responding to re-examination notices or failing to provide the required income and household documentation by established deadlines. In an effort to avoid unnecessary subsidy terminations and protect vulnerable tenants, the Authority’s administrative plan allows for extended grace periods and repeated follow-ups. While this tenant-centered approach helped mitigate adverse outcomes for families, it also contributed to delays and ultimately resulted in noncompliance with HUD’s timeliness requirements.
The Authority recognizes the critical importance of conducting timely and accurate annual reexaminations to maintain program integrity, ensure proper subsidy determination, and remain in compliance with HUD regulations. With that said, the Authority continues to work diligently with its third-party HCV contractors, city department partners, onsite service providers and property management companies to ensure the Authority is timely recertifying all assisted households. Although the Authority has established procedures to initiate reexaminations 150 days in advance of their due dates, a significant portion of the delays cited in the recent audit were the result of tenant non-responsiveness—specifically, the failure to provide required documentation despite multiple notices and outreach efforts. Importantly, all overdue reexaminations identified during the audit were ultimately completed. Each of the affected households was determined to be eligible under HUD guidelines, and housing assistance payments (HAPs) were accurately processed based on verified
household information.
The Authority remains committed to its tenant-centered mission, which prioritizes preventing unnecessary subsidy terminations and supporting household stability. At the same time, the Authority fully recognizes the importance of complying with HUD’s reexamination timelines. The corrective actions outlined below are designed to ensure that tenant-related delays are minimized, documented, and managed in a way that prevents the recurrence of this material weakness.
To address this finding and in accordance with the Authority’s Administrative Plan and HUD rules and regulations, the Authority has already implemented the following actions starting fiscal year 2023-24:
• Initiating the Annual Re-examination process 150 days before the required anniversary date to give households more time to comply.
• Reviewing the report of outstanding Annual Re-examinations on a weekly basis.
• Scheduling additional partner calls with property management and resident services to assist non-compliant families.
• Enforcing Annual Reexamination compliance through the Intent to Terminate process
• Scheduling and completing on-site visits for senior-disabled sites and non-restricted sites with large numbers of families out of compliance.
• Reviewing discrepancies between the Authority’s System of Record and PIH Information Center, the official database of HUD.
Per CFR 24 985.3, Section 8 Management Assessment Program (SEMAP) Indicator 9 for Annual Reexamination, 95% of all households must be recertified within 14 months of their last annual recertification to maintain full compliance, and 90% of all households must be recertified within 14 months to maintain partial compliance with the SEMAP Assessment standards required by HUD. The Authority expects to hit 90% by the end of the SEMAP year September 30, 2025.
Anticipated Implementation Date
September 30, 2025
Name(s) and Title(s) of Contact Person(s) Responsible for Correction Action
HCV Contractors
Kendra Crawford, Director of Housing Operations