Finding 1157051 (2024-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-09-30

AI Summary

  • Core Issue: The Authority included outdated income information during tenant annual reexaminations, leading to non-compliance with reporting requirements.
  • Impacted Requirements: The PHA must ensure accurate income verification as per HUD regulations, maintaining necessary documentation for audits.
  • Recommended Follow-Up: Implement stronger internal control procedures to ensure compliance with reporting standards and prevent future issues.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Catalog Numbers: 14.871 and 14.879 Noncompliance – L. Reporting - Special Reporting Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Reporting Criteria: Special Reporting. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority's files and on discussion with management, the Authority included income that was outdated during their annual reexamination. Context: There are approximately one thousand five hundred twenty six (1,526) units. Of a sample size of twenty eight (28) tenant files, two (2) tenants' annual recertification (HUD-50058 form) included income that was outdated. Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a significant deficiency in internal controls over the compliance for the reporting type of compliance related to special reporting. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the reporting type of compliance related to special reporting. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.

Corrective Action Plan

Authority's Response and Planned Corrective Action: Management agrees with the recommendation of the auditor. The Authority will increase oversight in the Housing Voucher Cluster to ensure that established internal control policies are being followed accurately and on a timely basis. Donald Paredez, Executive Director, is responsible for implementing this corrective action by December 31, 2025.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1157048 2024-003
    Material Weakness Repeat
  • 1157049 2024-004
    Material Weakness Repeat
  • 1157050 2024-005
    Material Weakness Repeat
  • 1157052 2024-004
    Material Weakness Repeat
  • 1157053 2024-005
    Material Weakness Repeat
  • 1157054 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $10.53M
14.872 Public Housing Capital Fund $2.21M
14.850 Public and Indian Housing $2.20M
14.879 Mainstream Vouchers $913,859
14.896 Family Self-Sufficiency Program $86,456