Finding 1080622 (2024-001)

Finding 2024-001 - Housing Choice Voucher Tenant Files - Eligibility - Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster - ALN 14.871and 14.EHV Condition & Cause: Our review of one hundred fifty (150) Housing Choice Voucher tenant files identified noncompliance in eleven (11) files, representing 7.3%. Of these, six (6) files contained errors in calculating annual income, with the most common issue being the incorrect annualization of wages due to using the wrong pay frequency. These errors often stemmed from manual calculation mistakes and inadequate cross-checking procedures. The remaining five (5) files lacked the required quarterly review of the Enterprise Income Verification {EIV) system for tenants who reported zero income, as stipulated by the Authority's Administrative Plan. Criteria: The Code of Federal Regulations and the Authority's Administrative Plan require accurate income calculations for determining Housing Assistance Payment (HAP) subsidies. Correct income verification and calculation are essential for compliance with HUD guidelines and ensuring proper subsidy amounts. Effect: Inadequate verification and incorrect calculation of participant income can lead to inaccuracies in financial statements, incorrect HAP subsidy calculations, and noncompliance with Federal Housing Choice Voucher program requirements. Recommendation: We recommend that the Authority establish a systematic review process for income calculations to ensure accuracy. This process should incorporate comprehensive staff training in correct calculation methods and include regular quality control checks to promptly identify and correct errors. Furthermore, the Authority should ensure stricter adherence to its Administrative Plan. Questioned Costs: Based on our extrapolation, the likely questioned costs amount to $63,317 in overpaid HAP. This represents approximately 0.2% of the total HAP expense and is considered immaterial to the financiaI statements. Repeat Finding: No Was sampling statistically valid? Yes