Finding 1103485 (2024-002)

US Department of Housing and Urban Development Direct Award Program Name Housing Choice Vouchers "Internal Control" Significant Deficiency N Special Test and Provisions ALN 14.871 2024-002 Utilities Allowance Calculation Criteria "In accordance with the 2014 Appropriations Act Section 242, the utility allowance for a family shall be the lower of: (1) The utility allowance amount for the family unit size; or (2) the utility allowance amount for the unit size of the unit rented by the family. However, upon the request of a family that includes a person with disabilities, the PHA must approve a utility allowance higher than the applicable amount if such a higher utility allowance is needed as a reasonable accommodation in accordance with HUD's regulations in 24 CFR part 8 to make the program accessible to and usable by the family member with a disability. This provision applies only to vouchers issued after the effective date of this notice (June 12, 2014) and to current program participants. For current program participants, a PHA must implement the new allowance at the family's next annual re-examination, provided that the PHA is able to provide a family with at least 60 days' notice prior to the re-examination. " Condition During the audit, we noted multiple HUD Forms 50058 had utility allowances calculated not in accordance with the above criteria. Context The Authority had roughly 270 vouchers issued throughout the fiscal year under examination which would translate to 3.240 Housing Assistance Payment transactions for the year. Of these we reviewed 40 individual Housing Assistance Payment transactions, and found 9 instances of noncompliance. Resulting in a 22.5% error rate. Extrapolation over all transactions that would result in 729 HAP transactions with this error. Cause Personnel responsible for calculating the utility allowances were not informed of requirements and no internal controls were in place to ensure compliance. Effect The Authority was in violation of the Federal Regulation which resulted in errors in calculating Housing Assistance Payments (HAP) and utility reimbursement payments. . Recommendations We recommend that management implement procedures to ensure compliance with the above regulations as it relates to the Section 8 Housing Choice Voucher Program. Management Views Management agrees, see Corrective Action Plan.