Finding Text
Finding: 2024‐002
U.S. Department of Housing & Urban Development
Program Name: Housing Voucher Cluster
AL Number: 14.871
Material Non‐Compliance
Material Weakness
Reporting, Special Tests and Provisions
Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that applicants have all required documentation in their file. In accordance with 24 CFR Part 5 Subpart F, the City must maintain documentation to support tenant eligibility.
In accordance with 24 CFR Part 908 and 24 CFR section 982.158, the Public Housing Agencies (PHA) are required to submit form HUD-50058, Family Report, electronically to HUD each time the PHA completes an issuance, admission, annual reexamination, interim reexamination, portability move-in, expiration, or other change of unit for a family.
In accordance with 24 CFR sections 960.202 through 960.208, the City must establish, adopt, and follow policies for admission of tenants as it relates to the Public Housing waiting list. All families admitted to the program must be selected from the waiting list.
In accordance with 24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507, the PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent.
In accordance with 24 CFR section 982.158 and 24 CFR Part 982, Subpart K, the PHA must pay a monthly Housing Assistance Payment (HAP) on behalf of the family that corresponds with the amount on the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register.
Condition: The Public Housing Department did not follow procedures to ensure the proper eligibility determination, waiting lists, reasonable rent and housing assistance payments were made and documented.
Context: Of the 1 new participant during the current year valued at $11,200, we examined 1 (valued at $11,200) and determined that 1 (100% valued at $11,200) was not supported with case documentation to confirm eligibility. The case file was missing documentation to support that the rent to the owners were reasonable and that the tenant was selected from the waiting list. The case file did not have proper documentation on file to support the amount on the HAP contract and did not have the form HUD-50058, Family Report.
Effect: Owners could receive benefits for which they are not eligible.
Cause: Weakness in implementation of controls over eligibility, reporting, and special tests procedures. Due to the turnover in the housing department, the City failed to obtain or retain the completed documentations required.
Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Likely questioned costs do not exceed $25,000.
Recommendation: Management should adhere to the program’s policy and maintain proper eligibility documentation in the applicant’s file.
Views of Responsible Officials and Planned Corrective Actions: The City agrees with this finding. Please refer to the Corrective Action Plan section of this report.