Finding 1120906 (2024-001)

2024-001 ALN 14.850 – Public Housing Operating Fund – Eligibility Condition and Criteria: In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit compliance requires that for tenant eligibility, tenant files include certain information and documentation that is both accurate and complete such as to obtain and document third-party verification of annual income and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the rent payment using this documentation. Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility. During our audit, it was determined that internal control deficiencies over compliance existed over the Authority’s Public Housing Operating Fund program eligibility determination process. The Authority's staff had inadequate internal controls over the Authority’s Public Housing Operating Fund tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. Of the eleven tenant files tested for eligibility compliance, seven of these files did not have current EIV (Enterprise Income Verification) documentation, or a signed Declaration of 214 Status. Three of the seven tenant files tested lacked supporting documentation for income and eligibility determination. Amount of Questioned Costs: None Context: The Authority's staff had inadequate internal controls over the Authority’s Public Housing Operating Fund tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. Of the eleven tenant files tested for eligibility compliance, seven of these files did not have current EIV (Enterprise Income Verification) documentation, or a signed Declaration of 214 Status. Three of the seven tenant files tested lacked supporting documentation for income and eligibility determination. Cause: The Authority did not have proper quality control procedures in place over monitoring required documentation in tenant files. The Authority lacked a clear understanding of HUD Public Housing Operating Fund eligibility requirements relating to the EIV system and HUD documentation requirements. Effect or Potential Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. Auditor’s Recommendation: In general, we recommend that the Authority review documentation requirements regarding tenant files. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. We also recommend that Authority staff obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or changed to the public housing industry. Grantee Response: Management acknowledges the finding and will follow the auditor’s recommendation.