Finding Text
2023-004 Eligibility
Section 8 Project-Based Cluster
Material Weakness in Internal Control
Material Noncompliance
Condition: Out of an approximate population of 670 of tenants, 20 tenant files were tested and the
following deficiencies were noted:
• Nine files did not have annual recertifications performed during the year,
•Eight files did not have 9886 release of information forms within 15 months of annual
recertification,
• Six files did not have an annual recertification performed within 12 months,
• Six files did not have documentation necessary to verify the reported income, and
• Three files did not have a 214 declaration form for all members of the household.
Criteria: 24 CFR 983.353 requires internal controls to be in place to ensure proper procedures are
being followed in compliance with HUD requirements regarding timely, complete, and accurate
tenant files.
Context: The auditor randomly selected tenant files out of the population as outlined, which we
consider to be a statistically valid sample size. The auditor reviewed the tenant files and support to
ensure that proper procedures are being followed and that the Authority is in compliance with HUD
requirements regarding timely, complete, and accurate tenant files.
Cause: The Authority experienced staffing and operational challenges during the onset of COVID-
19 and did not have the available staff to follow the established internal controls to ensure proper
compliance with regards to timely recertifications and collection of required HUD documentation to
verify eligibility and calculate accurate housing assistance payments.
Effect: The Authority is not in compliance with HUD requirements regarding eligibility which could
result in the incorrect amount of rental assistance provided.
Questioned Costs: Unknown.
Auditor Recommendations: The Authority should reevaluate their established procedures and
controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications.
The Authority needs to correct the deficiencies noted in the tested files and consider the impact to
the rest of the population of tenant files that were not selected as part of the auditor’s sample.
Management Response: See Corrective Action Plan.