Finding 1093405 (2024-001)

Finding 2024-001 – Housing Choice Voucher Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Program – ALN 14.871 and 14.EHV Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher Tenant Files and found eight (8) files that were not compliant, representing 12.3% of our audit sample. Nearly all the errors were related to income, specifically failures in properly verifying or calculating tenant income. The most common mistake involved incorrect year-to-date analysis. Additionally, one error occurred due to an annual reexamination conducted without tenant participation. We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. Despite these issues, we extrapolated the total potential misstatement and determined it to be immaterial to the financial statements. Criteria: The Code of Federal regulations, the Housing Authority’s Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of HAP subsidy and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the HCV program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $94,694. This amount accounts for 0.6% of the total HAP expense and is considered immaterial to the financial statements. Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.