Finding 1142450 (2024-001)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
$1
Year
2024
Accepted
2025-06-24

AI Summary

  • Core Issue: The Authority has significant compliance deficiencies in tenant eligibility documentation and reporting, leading to a material weakness in internal controls.
  • Impacted Requirements: Key federal regulations regarding tenant income verification, annual reviews, and documentation (24 CFR sections 5.212, 5.230, 982.516) are not being met.
  • Recommended Follow-Up: Implement staff training, conduct internal audits of tenant files, and establish a monitoring protocol to ensure ongoing compliance.

Finding Text

Finding 2024 – 001 – Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Numbers: 14.871 and 14.879 Federal Award Identification Number and Year: FL080; 2024 Award Period: October 1, 2023 to September 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) 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). (2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of assets; (3)expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR section 982.516). Condition: During testing of tenant files, certain eligibility and reporting compliance deficiencies were noted as summarized below: Number of Instances Finding 4 The file is missing support for the calculation of HAP. Of the files the Authority was able to provide. The files contained the following compliance deficiencies: Number of Instances Finding 18 The EIV was missing from the file. 3 The file was missing the HUD-9886 authorization form. 3 The file was missing the Authority’s general release form. 12 The Authority did not review the tenant’s information on an annual basis 5 The allowable expenditures included in the file were not included on the 50058 9 The HAP paid was understated 2 The HAP income information reported in the 50058 did not agree to support. Questioned Costs: $12,428 Context: Out of 60 housing voucher cluster tenant files tested, 32 tenant files contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as its administrative plan. Effect: The Authority is not in compliance with federal regulations regarding eligibility requirements, the calculation of tenant rent and HAP and verification of the tenant’s amounts reported on the HUD-50058. Repeat Finding: This is a repeat finding from previous years. The finding numbers are 2017-001, 2018-001, 2019-001, 2020-001, 2021-001, 2022-001, and 2023-001. Recommendation: To ensure compliance with federal requirements, we recommend the Authority takes the following actions: 1. Conduct training for program staff on eligibility documentation requirements and program rules. 2. Initiate internal audits of tenant files to identify and correct documentation issues proactively. 3. Establish a monitoring protocol to ensure continued compliance and to prevent recurrence of documentation issues. Views of Responsible Officials: There is no disagreement with the audit finding.

Categories

Questioned Costs HUD Housing Programs Subrecipient Monitoring Eligibility Material Weakness Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 566008 2024-001
    Material Weakness Repeat
  • 566009 2024-001
    Material Weakness Repeat
  • 566010 2024-001
    Material Weakness Repeat
  • 566011 2024-002
    Significant Deficiency Repeat
  • 566012 2024-002
    Significant Deficiency Repeat
  • 566013 2024-002
    Significant Deficiency Repeat
  • 566014 2024-003
    Significant Deficiency Repeat
  • 566015 2024-003
    Significant Deficiency Repeat
  • 566016 2024-003
    Significant Deficiency Repeat
  • 566017 2024-004
    Significant Deficiency Repeat
  • 566018 2024-004
    Significant Deficiency Repeat
  • 566019 2024-004
    Significant Deficiency Repeat
  • 566020 2024-005
    Significant Deficiency Repeat
  • 566021 2024-005
    Significant Deficiency Repeat
  • 566022 2024-005
    Significant Deficiency Repeat
  • 566023 2024-006
    Significant Deficiency Repeat
  • 566024 2024-007
    Significant Deficiency
  • 1142451 2024-001
    Material Weakness Repeat
  • 1142452 2024-001
    Material Weakness Repeat
  • 1142453 2024-002
    Significant Deficiency Repeat
  • 1142454 2024-002
    Significant Deficiency Repeat
  • 1142455 2024-002
    Significant Deficiency Repeat
  • 1142456 2024-003
    Significant Deficiency Repeat
  • 1142457 2024-003
    Significant Deficiency Repeat
  • 1142458 2024-003
    Significant Deficiency Repeat
  • 1142459 2024-004
    Significant Deficiency Repeat
  • 1142460 2024-004
    Significant Deficiency Repeat
  • 1142461 2024-004
    Significant Deficiency Repeat
  • 1142462 2024-005
    Significant Deficiency Repeat
  • 1142463 2024-005
    Significant Deficiency Repeat
  • 1142464 2024-005
    Significant Deficiency Repeat
  • 1142465 2024-006
    Significant Deficiency Repeat
  • 1142466 2024-007
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $40.81M
14.879 Mainstream Vouchers $4.46M
14.241 Housing Opportunities for Persons with Aids $3.56M
14.850 Public Housing Operating Fund $1.75M
14.871 Emergency Housing Vouchers $1.48M
14.872 Public Housing Capital Fund $946,341
14.895 Jobs-Plus Pilot Initiative $690,328
17.274 Youthbuild $389,862
14.896 Family Self-Sufficiency Program $140,985
14.870 Resident Opportunity and Supportive Services - Service Coordinators $83,755