Finding Text
2024-002 Documentation Retention – Tenant File (Internal Control) Information on universe and population size The universe consisted of all Housing Choice Voucher (HCV) files for tenants certified and re-certified by the Authority for the fiscal year. The total population was 182. Sample size information A non‑statistical sample of 19 tenant files were selected for testing. One error was identified. Identification as a repeat finding This is not a repeat finding. Criteria 2 CFR §200.303(c) requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable laws, regulations, and program requirements. HUD Housing Choice Voucher Program guidance (HUD Handbook 7420.7, Chapter 5) includes that maintaining complete tenant files, including form HUD-50058, executed leases, income verification, rent determinations, inspection documentation, and related support, is a key control. Statement of condition During our review of 19 tenant files, one file had missing required documents. The required documents that were not included consisted of the executed lease, rent determinations, and inspection documentation. Although alternative documentation confirmed the tenant’s eligibility in the program, the absence of the required original supporting records demonstrates that the controls over document retention and safeguarding were not operating effectively. Cause The PHA lacks a formalized record‑retention control that prevents accidental deletion or destruction of tenant files and does not perform a supervisory review to verify that all electronic and hard‑copy records are archived before files are purged. Effect Absent proper documentation, the PHA cannot fully demonstrate tenant eligibility, increasing the risk of ineligible assistance payments and regulatory noncompliance. Because the issue was isolated to a single tenant file, the likelihood of material noncompliance is remote; however, it represents a significant deficiency. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and is in the process of implementing an electronic document‑management system with automated backup and periodic supervisory reviews to prevent future occurrences. Context This was an isolated instance of noncompliance, affecting 1 of 19 tenant files tested. No systemic issues were noted in the other files reviewed. Recommendation We recommend that the Authority design and implement a record‑retention policy and require supervisory review prior to any file purging to ensure all required documentation is retained.Finding resolution status Unresolved Information on universe and population size The universe consisted of all Housing Choice Voucher (HCV) files for tenants certified and re-certified by the Authority for the fiscal year. The total population was 182. Sample size information A non‑statistical sample of 19 tenant files were selected for testing. One error was identified. Identification as a repeat finding This is not a repeat finding. Criteria 2 CFR §200.303(c) requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable laws, regulations, and program requirements. HUD Housing Choice Voucher Program guidance (HUD Handbook 7420.7, Chapter 5) includes that maintaining complete tenant files, including form HUD-50058, executed leases, income verification, rent determinations, inspection documentation, and related support, is a key control. Statement of condition During our review of 19 tenant files, one file had missing required documents. The required documents that were not included consisted of the executed lease, rent determinations, and inspection documentation. Although alternative documentation confirmed the tenant’s eligibility in the program, the absence of the required original supporting records demonstrates that the controls over document retention and safeguarding were not operating effectively. Cause The PHA lacks a formalized record‑retention control that prevents accidental deletion or destruction of tenant files and does not perform a supervisory review to verify that all electronic and hard‑copy records are archived before files are purged. Effect Absent proper documentation, the PHA cannot fully demonstrate tenant eligibility, increasing the risk of ineligible assistance payments and regulatory noncompliance. Because the issue was isolated to a single tenant file, the likelihood of material noncompliance is remote; however, it represents a significant deficiency. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and is in the process of implementing an electronic document‑management system with automated backup and periodic supervisory reviews to prevent future occurrences. Context This was an isolated instance of noncompliance, affecting 1 of 19 tenant files tested. No systemic issues were noted in the other files reviewed. Recommendation We recommend that the Authority design and implement a record‑retention policy and require supervisory review prior to any file purging to ensure all required documentation is retained.