Finding Text
Assistance Listing Numbers: 14.871 – Housing Voucher Cluster
Federal Agency: U.S. Department of Housing and Urban Development
Pass-through Entity: N/A
Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance
Compliance Requirement: Special Tests and Provisions
Questioned Costs: None
Criteria
24 CFR 982.305(a) requires that grantees must inspect housing units at least biennially, and annually
per their Housing Administrative Plan, to determine whether housing units meet Housing Quality
Standards. 2 CFR 200 requires that internal control over compliance be established to provide
reasonable assurance for compliance.
Condition
During our audit testing, we haphazardly selected a sample of 40 tenants to determine if the
admission criteria were met. Of those 40 tenants, we identified 7 instances where an inspection was
not conducted on an annual basis.
Cause
The City’s established procedures did not include sufficient controls to ensure that the criteria were
met in accordance with policy and regulation before the housing assistance payments were authorized.
Effect
The City was not in compliance with these program requirements.
Recommendation
We recommend that management strengthen controls to ensure that housing assistance payments are
not authorized before the required criteria are met. Ideally, this would include changes to the
authorization process that prevent authorization from being made without the review having been
completed.
Management’s Response
Management acknowledges the audit finding related to Material Weakness in Internal Control over
Compliance and Noncompliance for 14.841 – Housing Voucher Cluster. We agree with the assessment
and recognize the importance of addressing the underlying issue to enhance the organization's
operations and internal controls.
To resolve this issue, the City has already implemented staffing changes aimed at addressing this
material weakness and better program management for housing. These changes include the hiring of
Terrence Hamilton. Terrence comes to the City with a strong background in housing and has already
implemented structural changes to address housing division needs.
Management is confident that the hiring of Terrence and the support for his actions have effectively
remediated the material weakness and will help prevent similar issues in the future. We remain
committed to maintaining strong internal controls and will continue to monitor the effectiveness of
these changes regularly.