Finding 1103075 (2024-001)

2024-001 – ALN 14.871 – Housing Choice Voucher Program - Eligibility Condition and Criteria: H&P identified 3 deviations out of 25 files where the file was missing required forms for admission or continued occupancy, including lack of a citizenship form for a family member, lack of two forms of identification for a family member, and lack of a signed HUD Form 9886 for all family members over the age of 18. H&P noted an exception in which 4 out of 25 files had the incorrect utility allowance and/or payment standard, which directly affects the Authority's and tenant's contributions towards rent. In addition, H&P noted the Authority is not retaining copies of current or older EIV reports after they are printed; therefore, we were only able to verify 2 instances in which EIV reports are being adequately run within 120 days of a tenant's move in date and ensuring the tenant is properly reporting income. These deviations resulted in compliance exceptions and are the result of internal control deficiencies. In accordance with HUD requirements, the Authority is required to maintain compliance with various HCV program compliance requirements identified in the Uniform Guidance. The applicable compliance provisions include Tenant Eligibility and Rent Reasonableness. During our audit, it was determined that internal control deficiencies over compliance existed in the Authority's HCV eligibility process. The Authority's internal controls over their eligibility process are deficient, as the Authority's staff failed to adequately apply the controls that have been implemented over family income examinations and reexaminations. Amount of Questioned Costs. None. Context: Three deviations out of twenty-five files where the file was missing required forms for admission or continued occupancy, including lack of a citizenship form for a family member, lack of two forms of identification for a family member, and lack of a signed HUD Form 9886 for all family members over the age of 18. Four out of twenty-five files had the incorrect utility allowance and/or payment standard, which directly affects the Authority's and tenant's contributions towards rent. The Authority is not retaining copies of current or older EIV reports after they are printed Cause: The Authority's management and staff who are responsible for the HCV eligibility did not design or implement adequate internal controls. Effect: Some of the Authority's tenants were not and/or are potentially not paying the correct amount of rent. In addition, our Firm was unable to determine if the Authority is utilizing the EIV system for new move-ins. Auditor’s Recommendation: We recommend the Authority review the internal controls over eligibility of the HCV program to maintain proper compliance with HUD's rules and regulations. The Authority needs to ensure that employees are fully and adequately trained in performing the procedures necessary to maintain proper compliance. The staff and management should continue to obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or change to the public housing industry. The Authority should also strengthen their monitoring controls to improve the detection and correction of misstatements by ensuring that any errors, discrepancies, or instances of noncompliance are detected and corrected in a timely manner. We also recommend that someone other than the employee performing the family income examinations and reexaminations perform periodic internal audits of tenant files to ensure that all eligibility and reexamination steps are being performed properly and in line with Federal regulations. Grantee Response: Current management acknowledges the finding and the Authority's management is currently implementing the necessary changes and training to remediate these noncompliance instances.