Finding Text
Allowability - Landlord Overpayments
Housing Voucher Cluster
Significant Deficiency in Internal Control
Other Matter to be Reported Under the Uniform Guidance
Condition: The Authority made numerous overpayments in HAP to landlords starting in
the month of October 2023. A variance in HAP disbursements was noted by the
Department of Housing and Urban Development (HUD), and upon further investigation by
management it was determined that the overpayment to landlords was not caught by staff
when the original disbursements were made.
Criteria: HUD enters into Annual Contributions Contracts (ACCs) with PHAs under which
HUD provides funds to the PHAs to administer the HCV program locally. HUD provides
funds for the payments to landlords based on the Authority’s 50058 calculation. Amounts
paid to landlord should be based on those calculations.
Context: The Authority notified the auditor at the beginning of the audit when management
became aware of the overpayment issue.
Effect: The Authority is not in compliance with applicable regulations regarding allowable
use of HAP funds.
Cause: The Authority underwent a software conversion during the year which caused
issues with the landlord payment module for HCV. There was inadequate review
performed on the process and controls over the posting of HAP payments to landlords
within the new system that allowed for the error to continue until April 2024.
Questioned Costs: $242,129, during fiscal year.
Auditor Recommendations: The Authority should work on recapturing overpaid funds from
landlords that have current tenant agreements. The Authority should also monitor internal
controls in place with the new software to make sure the accounting software is functioning
properly.
Management Response: See Corrective Action Plan.