Finding Text
2024 – 007 – PBRA/MOD – Utility Allowances
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: The PHA or owner must (a) establish or ensure tenant utility allowances based on utility consumption and rate data for various sized units, structure types, and fuel types, (b) make an annual review of tenant utility allowances to determine their reasonableness, and (c) adjust the allowances, when appropriate (24 CFR sections 5.603, 880.610, 881.601, 882.510, 882.808(k), 883.701, 884.220, 886.126, and 886.326).
Condition: During our testing, we noted the Commission did not have adequate internal controls designed to ensure utility allowances were properly applied.
Questioned costs: Unknown
Context:
Testing of 40 tenant files revealed the following 6 exceptions:
6 files where the utility allowance on the 50058/50059 did not match the approved utility allowance
Cause: The Commission does not have internal controls in place to ensure it is meeting program requirements over utility allowances.
Effect: The Commission is not in compliance with program requirements over utility allowances.
Repeat Finding: Not a repeat finding.
Recommendation: The Commission should implement processes to ensure that utility allowances are properly applied.
View of Responsible Officials: There is no disagreement with the audit finding.