FAC Explorer

Finding 1146128 (2024-006)

Material Weakness Repeat Finding
Requirement
ALN
Questioned Costs
-
Year
2024
Accepted
2025-06-30
Audit: 361021
Organization: City of Long Beach (CA)
Auditor: Crowe LLP

AI Summary

  • Core Issue: The Public Housing Authority (PHA) lacks a secondary review process for tenant income reexaminations, risking compliance with eligibility and reporting requirements.
  • Impacted Requirements: This affects compliance with Housing Assistance Payments, reporting accuracy, and allowable costs as per HUD regulations.
  • Recommended Follow-Up: Implement a secondary review process for income reexaminations to enhance internal controls and ensure compliance.

Finding Text

Finding Number: 2024-006 Finding Title: Internal controls Over Compliance Participants Reexaminations, Housing Assistance Payments and Related Reporting Compliance Requirement(s): Special Tests – Housing Assistance Payment, Reporting, Allowed and Unallowed Costs Classification: Material Weakness Programs: Section 8 Housing Choice Vouchers ALN #: 14.871 Pass-through entity: N/A – Direct Award Federal Agency: Department of Housing and Urban Development (HUD) Federal Award Numbers: Multiple – City receives incremental funding throughout the year Federal Award Year: 2024 Criteria or specific requirement (including statutory, regulatory, or other citation Allowable Costs Principles ; Activities Allowed and Unallowed; Eligibility § 982.201 Eligibility and targeting. (3) The annual income (gross income) of an applicant family is used both for determination of income-eligibility under paragraph (b)(1) of this section and for targeting under paragraph (b)(2)(i) of this section. In determining annual income of an applicant family that includes a person with disabilities, the determination must include the disallowance of increase in annual income as provided in 24 CFR 5.617, if applicable. (4) The applicable income limit for issuance of a voucher when a family is selected for the program is the highest income limit (for the family size) for areas in the PHA jurisdiction. The applicable income limit for admission to the program is the income limit for the area where the family is initially assisted in the program. At admission, the family may only use the voucher to rent a unit in an area where the family is income eligible. Housing Assistance Payments (e) Effective date of reexamination. (1) The PHA must adopt policies consistent with this section prescribing how to determine the effective date of a change in the housing assistance payment resulting from an interim redetermination. (2) At the effective date of a regular or interim reexamination, the PHA must make appropriate adjustments in the housing assistance payment in accordance with § 982.505. (f) Accuracy of family income data. The PHA must establish procedures that are appropriate and necessary to assure that income data provided by applicant or participant families is complete and accurate. The PHA will not be considered out of compliance with the requirements in this section solely due to de minimis errors in calculating family income but is still obligated to correct errors once the PHA becomes aware of the errors. A de minimis error is an error where the PHA determination of family income deviates from the correct income determination by no more than $30 per month in monthly adjusted income ($360 in annual adjusted income). Reporting 24CFR982.516(d) Family reporting of change. The PHA must adopt policies consistent with this section prescribing when and under what conditions the family must report a change in family income or composition. HUD collects Tenant data to understand demographic, family profile, income, and housing information for participants in the Public Housing, Section 8 Housing Choice Voucher, Section 8 Project Based Certificate, Section 8 Moderate Rehabilitation, and Moving to Work Demonstration programs. This data also allows HUD to monitor the performance of programs and the performance of public housing agencies that administer the programs. 24 CFR Part 908 and 24 CFR section 982.158 The HUD-50058, Family Report (OMB No. 2577-0083) is required to be submitted by the PHA electronically to HUD each time the PHA completes an issuance, admission, annual reexamination, interim reexamination, portability move-in, expiration, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability. 2 CFR 200 SUBPART D – POST FEDERAL AWARD REQUIREMENTS 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure eligibility criteria are met and documented. Condition The Public Housing Authority (PHA) of the City of Long Beach did not have procedures implemented for a secondary review during the process of income tenant income reexamination. Insufficient internal controls around reexaminations of income could lead noncompliance with Eligibility, Reporting, Housing assistance payment, and expenditure allowability requirements. Cause The PHA did not have control procedures in place for a secondary review on income reexaminations but is in the process of implementing a control which was not in place for the fiscal year under audit due to understaffing. Effect or potential effect Insufficient controls over the reexamination process could lead to ineligible participants in the program, housing assistance payments that are either incorrect or to ineligible participants, and inaccurate reporting to HUD. Questioned costs None Context We tested 62 reexaminations, none of which included a secondary review. Identification as a repeat finding if applicable 2023-009 Recommendation We recommend the PHA establish a secondary review over the reexamination of income of program participants. Views of responsible officials and planned corrective actions While HUD does not mandate a secondary review of files or allocate additional funding for such activities, HACLB recognizes the critical importance of accurate participant data, timely housing assistance payments, and compliance with HUD reporting requirements. HACLB has established and continues to enhance a system of internal controls to ensure program integrity and compliance. HACLB leverages its MRI housing management software to automate data validation and error detection in alignment with HUD’s PIC requirements, ensuring accurate and compliant submissions. The system flags validation errors for correction before transmission, while additional oversight through the PIC Error Dashboard, SEMAP evaluations, and internal file reviews supports ongoing quality control. Errors identified through these processes are used for staff training and performance improvement, with new Housing Specialists’ work closely monitored to uphold accuracy and program integrity. With the utilization of MRI housing management software and PIC systems, enhanced quality control processes, ongoing staff training, and proactive monitoring, HACLB is confident in its ability to maintain strong internal controls, ensure compliance with HUD requirements, and safeguard program integrity.

Categories

HUD Housing Programs Eligibility Subrecipient Monitoring Allowable Costs / Cost Principles Material Weakness Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 569667 2024-001
    Material Weakness Repeat
  • 569668 2024-001
    Material Weakness Repeat
  • 569669 2024-001
    Material Weakness Repeat
  • 569670 2024-001
    Material Weakness Repeat
  • 569671 2024-001
    Material Weakness Repeat
  • 569672 2024-001
    Material Weakness Repeat
  • 569673 2024-002
    Material Weakness Repeat
  • 569674 2024-002
    Material Weakness Repeat
  • 569675 2024-002
    Material Weakness Repeat
  • 569676 2024-002
    Material Weakness Repeat
  • 569677 2024-002
    Material Weakness Repeat
  • 569678 2024-002
    Material Weakness Repeat
  • 569679 2024-003
    Material Weakness Repeat
  • 569680 2024-003
    Material Weakness Repeat
  • 569681 2024-004
    Significant Deficiency
  • 569682 2024-004
    Significant Deficiency
  • 569683 2024-005
    Material Weakness Repeat
  • 569684 2024-005
    Material Weakness Repeat
  • 569685 2024-006
    Material Weakness Repeat
  • 569686 2024-006
    Material Weakness Repeat
  • 569687 2024-007
    -
  • 569688 2024-007
    -
  • 1146109 2024-001
    Material Weakness Repeat
  • 1146110 2024-001
    Material Weakness Repeat
  • 1146111 2024-001
    Material Weakness Repeat
  • 1146112 2024-001
    Material Weakness Repeat
  • 1146113 2024-001
    Material Weakness Repeat
  • 1146114 2024-001
    Material Weakness Repeat
  • 1146115 2024-002
    Material Weakness Repeat
  • 1146116 2024-002
    Material Weakness Repeat
  • 1146117 2024-002
    Material Weakness Repeat
  • 1146118 2024-002
    Material Weakness Repeat
  • 1146119 2024-002
    Material Weakness Repeat
  • 1146120 2024-002
    Material Weakness Repeat
  • 1146121 2024-003
    Material Weakness Repeat
  • 1146122 2024-003
    Material Weakness Repeat
  • 1146123 2024-004
    Significant Deficiency
  • 1146124 2024-004
    Significant Deficiency
  • 1146125 2024-005
    Material Weakness Repeat
  • 1146126 2024-005
    Material Weakness Repeat
  • 1146127 2024-006
    Material Weakness Repeat
  • 1146129 2024-007
    -
  • 1146130 2024-007
    -

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $120.21M
14.871 Covid-19 Section 8 Housing Choice Vouchers $10.23M
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $4.78M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $4.71M
15.916 Outdoor Recreation Acquisition, Development and Planning $3.25M
14.218 Community Development Block Grants/entitlement Grants $3.09M
14.239 Covid-19 Home Investment Partnerships Program $2.69M
14.267 Continuum of Care Program $2.64M
93.391 Covid-19 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $2.49M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $2.24M
93.967 Centers for Disease Control and Prevention Collaboration with Academia to Strengthen Public Health $2.18M
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $1.40M
14.905 Lead Hazard Reduction Demonstration Grant Program $1.38M
97.083 Staffing for Adequate Fire and Emergency Response (safer) $1.12M
93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants $999,999
97.056 Port Security Grant Program $932,765
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $854,633
93.069 Public Health Emergency Preparedness $665,205
21.023 Covid-19 Emergency Rental Assistance Program $507,069
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $490,848
93.917 Hiv Care Formula Grants $484,663
14.239 Home Investment Partnerships Program $451,935
14.896 Family Self-Sufficiency Program $432,780
93.268 Immunization Cooperative Agreements $432,307
93.197 Childhood Lead Poisoning Prevention Projects, State and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $429,620
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $410,894
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $383,791
97.039 Hazard Mitigation Grant $382,753
17.278 Wioa Dislocated Worker Formula Grants $350,555
97.067 Homeland Security Grant Program $300,000
93.914 Hiv Emergency Relief Project Grants $289,938
20.600 State and Community Highway Safety $284,300
93.779 Centers for Medicare and Medicaid Services (cms) Research, Demonstrations and Evaluations $256,377
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $231,566
20.616 National Priority Safety Programs $218,597
93.994 Maternal and Child Health Services Block Grant to the States $210,338
20.823 Port Infrastructure Development Program $188,954
11.307 Economic Adjustment Assistance $182,968
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $178,614
93.778 Medical Assistance Program $176,132
14.218 Covid-19 Community Development Block Grants/entitlement Grants $158,157
17.258 Wioa Adult Program $158,086
14.231 Covid-19 Emergency Solutions Grant Program $152,789
20.106 Covid-19 Airport Improvement Program $150,326
10.559 Summer Food Service Program for Children $140,895
17.277 Wioa National Dislocated Worker Grants / Wia National Emergency Grants $126,319
15.514 Reclamation States Emergency Drought Relief $122,865
16.835 Body Worn Camera Policy and Implementation $115,530
14.241 Housing Opportunities for Persons with Aids $102,582
66.472 Beach Monitoring and Notification Program Implementation Grants $100,392
14.895 Jobs-Plus Pilot Initiative $100,000
93.078 Strengthening Emergency Care Delivery in the United States Healthcare System Through Health Information and Promotion $100,000
97.042 Emergency Management Performance Grants $96,606
93.070 Environmental Public Health and Emergency Response $93,505
17.259 Wioa Youth Activities $92,985
93.354 Covid-19 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $90,945
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $80,000
14.231 Emergency Solutions Grant Program $78,943
14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants $78,176
93.318 Protecting and Improving Health Globally: Building and Strengthening Public Health Impact, Systems, Capacity and Security $76,544
20.106 Airport Improvement Program $73,897
93.558 Temporary Assistance for Needy Families $71,000
14.900 Lead Hazard Reduction Grant Program $65,146
93.977 Sexually Transmitted Diseases (std) Prevention and Control Grants $60,794
10.727 Inflation Reduction Act Urban & Community Forestry Program $53,135
16.710 Public Safety Partnership and Community Policing Grants $49,436
15.507 Watersmart (sustain and Manage America’s Resources for Tomorrow) $44,081
93.421 Covid-19 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $28,826
14.913 Healthy Homes Production Program $17,399
93.940 Hiv Prevention Activities Health Department Based $9,832
16.738 Edward Byrne Memorial Justice Assistance Grant Program $6,578
20.205 Covid-19 Highway Planning and Construction $5,130
20.205 Highway Planning and Construction $558