Finding Text
Criteria - Uniform Guidance (2 CFR §200.303) requires recipients of federal awards to establish and maintain effective internal controls over compliance. Specifically, 24 CFR §982.201 and related program requirements for the Housing Choice Voucher Program (HCV) (Assistance Listing Number 14.871) mandate:
1) Documentation of eligibility (including citizenship/immigration status and income verification).
2) Signed lease agreements between the tenant and owner.
3) Rent reasonableness determinations for all units.
4) Housing Quality Standards (HQS) inspections must be documented prior to lease-up and annually thereafter.
5) Recertifications (HUD-50058) and authorizations to release information (HUD-9886) must be on file.
Condition - During testing of 40 participant files, we were unable to verify compliance with key program requirements due to missing documentation as detailed below:
Deficiency Number of Files Affected
Missing signed application 19 out of 40
Missing signed lease agreement 29 out of 40
Missing proof of citizenship/eligible immigration status 20 out of 40
Missing documentation of independent income verification 11 out of 40
Missing HUD-50058 recertification 11 out of 40
Missing HUD-9886 (Authorization for Release of Information) 14 out of 40
Missing documentation of rent reasonableness 18 out of 40
Missing HQS inspection documentation 25 out of 40
Cause - The Authority did not maintain adequate documentation in participant files, indicating a lack of effective internal controls over file management and compliance monitoring.
Effect - The absence of required documentation increases the risk of non-compliance with HUD regulations, which may result in findings during HUD reviews or audits and possible loss of HUD funding or sanctions if deficiencies are not corrected.
Questioned Costs - Due to missing documentation, the allowability of housing assistance payments for the impacted participants cannot be determined.
Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample.
Recommendation - To address the deficiencies identified in the HCV Program tenant files, we recommend that the Authority implement comprehensive measures to strengthen compliance and improve internal controls. First, the Authority should conduct a full review of all tenant files to identify and resolve missing documentation, using a standardized checklist to ensure all required documents are included in each file.
Management’s Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendations, please see below for action taken.
(b) Action taken - The Authority will conduct a thorough review of all tenant files to identify and resolve missing documentation, including signed applications, lease agreements, proof of citizenship or eligible immigration status, independent income verification, HUD forms (50058 and 9886), rent reasonableness documentation, and HQS inspection records. Staff will work to obtain missing documents from tenants, landlords, or other necessary parties. A standardized checklist should be used to ensure all required items are present in each file moving forward.
(c) Planned implementation date of corrective action - Completed by September 30, 2025.