Finding 1118240 (2023-002)

Finding 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Assisted Listing Number: 14.850 Noncompliance – E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were files in which the verification of income eligibility was not properly performed. Context: Of a sample size of twenty (20) tenant files, two (2) files had income which was not properly calculated and verified. Our sample size is statistically valid. Known Questioned Costs: $10,806 Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Authority Response: The Authority agrees with the finding and is in process of assessing and modifying controls over compliance to avoid similar issues. The Authority will increase oversight of the compliance of program.