Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: CA005/CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Eligibility The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: The Agency did not have adequate internal controls designed to ensure eligibility requirements were being met for City and County. Questioned Costs: Unable to determine. Context: During the testing of the public housing program files for eligibility, the following deficiencies were noted in 16 of 40 files: - City : 8 instances where the annual certification was not completed on an annual basis. - County : 7 instances where the annual certification was not completed on an annual basis. - County: 1 instance where the annual recertification was not completed in 2024. The most recent annual recertification had been conducted in 2022. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Further, staff changes and tenants providing documentation in a delayed manner contributed to the issues observed. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months. Repeat Finding: Yes, (2023-005) Recommendation: We recommend that management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.