Finding Text
Finding 2024-001 – Public Housing Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Significant Deficiency - Low Income Public Housing - ALN 14.850 Condition & Cause: We randomly selected fifty (50) tenant files for review. We noted eighteen (18) tenant files were out of compliance in one or more categories. Of these, five (5) files, or 10%, were impacted by errors related to adjusted annual income. Based on these errors, we extrapolated the potential rental charge misstatement and found it represented approximately 0.3% of total program rental revenue, which is immaterial to the financial statements. In our review, we noted: • Four (4) files had improper or missing income verification; • One (1) file contained a miscalculation of annual income; • Thirteen (13) files lacked documentation of required unit inspections; • Two (2) were missing the required Enterprise Income Verification (EIV) reports, or the reports were generated significantly after the effective date; • Two (2) annual reexaminations were completed more than three months past due. Agency management attributed these deficiencies, in part, to significant staff turnover during the year. It should be noted that the missed inspections were isolated to Asset Management Projects (AMPs) where the inspector position was vacant for part of the year. Criteria: Title 24 of the Code of Federal regulations, the Housing Authority’s Admissions and Continued Occupancy Policy, and specific HUD guidelines in documenting and maintaining the Public Housing tenant files. Effect: Failure to properly verify and calculate tenant income can result in misstatements of operating income and the operating subsidy earned by the Housing Authority. Inaccurate rental charges may also impose an undue financial burden on tenants, undermining the Agency’s mission to provide affordable housing. Additionally, the lack of timely unit inspections may result in noncompliance with HUD regulations and compromise the Agency’s ability to ensure that units meet housing quality standards. This increases the risk of undetected maintenance issues, potential safety concerns for residents, and further noncompliance findings in future reviews. Recommendation: The Authority has implemented internal quality control processes for most tenant reexaminations. We recommend continued monitoring of these controls for effectiveness, along with targeted staff training to address errors in income calculation and verification. Regarding inspections, we recommend that the Authority develop and implement procedures to ensure that required unit inspections are completed on time, including during periods of staff turnover or position vacancies. This may include cross-training staff, temporary assignments, or use of third-party inspectors to maintain compliance with inspection requirements. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.