Finding Text
2024 – 003 – PBRA/MOD Eligibility
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Section 8 Project-Based Cluster
Assistance Listing Number: 14.195/14.856
Federal Award Identification Number and Year: MD004 (various funding increments active during period 7/1/23-6/30/24)
Award Period: July 1, 2023 through June 30, 2024
Type of Finding:
-Material Weakness in Internal Control over Compliance.
-Material Noncompliance (Modified Opinion)
Criteria: As a condition of admission or continue occupancy, PHA’s must determine eligibility of applicants by (a) obtaining signed applications that contain the information needed to determine eligibility (including designation as elderly, disabled, or homeless, if applicable), income, rent, and order of selection; (b) conducting verifications of family income and other pertinent information (such as assets, full time student and immigration status, and unusual medical expenses) through third parties; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD for the PHA’s jurisdiction, as shown in HUD’s published notice transmitting the Limits for Low-Income and Very Low-Income Families Under the Housing Act of 1937. For the Mod Rehab SRO program, eligible individuals must be homeless upon entry into the program (24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318).
Condition: During our testing, we noted the Commission did not have adequate internal controls designed to ensure that eligibility requirements were being met.
Questioned costs: $21,838
Context: Testing of 60 tenant files for eligibility revealed that 38 files had the following exceptions:
-26 files were missing the application which includes signoff from the program specialist
-28 files were missing documentation needed to support and recalculate total income per HUD-50058/HUD-50059
-27 files that were missing support needed to substantiate the asset total per HUD-50058/HUD-50059
-27 files that were missing support needed to substantiate the expenses total per HUD-50058/HUD-50059
-3 files where the annual examination was not processed within 12-month regulatory period
-34 files that were missing the recertification checklist as part of their internal controls
Cause: The Commission does not have controls in place to ensure it is meeting eligibility requirements set by HUD.
Effect: The Commission is not in compliance with program requirements over eligibility.
Repeat Finding: Yes.
Recommendation: The Commission should implement processes to ensure that all proper documentation is being maintained during the recertification process for every client.
View of Responsible Officials: There is no disagreement with the audit finding.