Finding 1157536 (2024-003)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
$1
Year
2024
Accepted
2025-09-30

AI Summary

  • Core Issue: Significant deficiencies in internal controls over compliance with eligibility requirements for low-income families.
  • Impacted Requirements: Compliance with Section 3(b)(2) of the 1937 Housing Act, including timely recertifications and accurate documentation.
  • Recommended Follow-Up: HABC staff should enhance monitoring controls to ensure all eligibility documentation is complete, accurate, and available for audit.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Award Identification Number and Year: MDO002VO-2024 Award Period: 1/1/2024-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))). Condition: 80 files were selected from a population of MTW-HCV & LRPH. 3 files contained 5 errors. Questioned costs: $10,231 instances of deficiencies: - For 1 of 80 files tested we were unable to determine that recertifications were performed timely. - For 1 of 80 files tested the authority was unable to provide the documentation for the tenant required for testing. - For 1 of 80 files tested we were not provided with third party income support, or the Personal Declaration of Continued Occupancy Application. - For 1 of 80 files tested there was a variance between the rent received per the rent roll and the tenant rent per the HUD 50058. - For 1 of 80 files tested there was no signed Personal Declaration and Continued Occupancy Application form. Cause: The Authority did not sufficiently monitor controls to ensure compliance with eligibility requirements. Effect: The Authority is not in compliance with federal regulations regarding eligibility. Tenant rent may have been miscalculated due to using incorrect information in the rent calculation. Tenant recertifications were not shown to be performed on a timely basis. Repeat Finding: Not a repeat finding. Recommendation: We recommend that HABC staff review the controls in place to ensure that required eligibility determination documentation is complete, accurate, and available for audit. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Moving to Work Demonstration Program – Assistance Listing No 14.881 Recommendation: We recommend that HABC staff review the controls in place to ensure that required eligibility determination documentation is complete, accurate, and available for audit. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Housing Choice Voucher Program response: Out of 40 files reviewed, one exception was noted where recertification was not performed in a timely manner. HABC developed a strategy to verify that all existing recertifications are processed on time. The goal is to catch up by January 2026 and maintain timely processing going forward. HABC has updated its recertification tracking system as part of this plan. This includes measures for weekly progress monitoring, tracking upcoming deadlines, and implementing quality control to support the timely processing of recertifications. Housing Operations response: Housing Operations response: Out of 40 files reviewed, there were two exceptions noted: (1) Documentation was not provided to support the rent amount showing on the rent roll; in that instance, the transaction was corrected after the rent roll had been generated, and the rent amount billed was corrected. The resident was not responsible for paying an incorrect rent amount; Exception (#2) and (#3) are related to same file folder: (2) one requested resident file folder was not submitted for testing; and (3) Third party income verification documentation (including the resident’s signed personal declaration) could not be identified; the file folder was not properly scanned into the electronic document management system and select documents were not otherwise maintained. HABC’s Housing Operations Department will require that all transactions have two levels of review/approval to ensure complete and accurate documentation is scanned into the electronic document management system. Name(s) of the contact person(s) responsible for corrective action: Stefanie Beale, Senior Manager, Continued Assistance & Site Based (HCVP), and Rhonda VanDyke, Senior Manager of Public Housing Administration (LIPH). Planned completion date for corrective action plan: 01/31/2026 for HCVP and 12/31/2025 for LIPH

Categories

Questioned Costs Eligibility HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1157537 2024-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.881 Moving to Work Demonstration Program $443.49M
21.027 Coronavirus State and Local Fiscal Recovery Funds $10.29M
14.871 Section 8 Housing Choice Vouchers $4.70M
14.889 Choice Neighborhoods Implementation Grants $3.36M
14.879 Mainstream Vouchers $1.67M
14.870 Resident Opportunity and Supportive Services - Service Coordinators $522,142
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $498,981
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $321,783
14.866 Demolition and Revitalization of Severely Distressed Public Housing $180,000
32.001 Affordable Connectivity Program $20,466