Finding 1160350 (2024-003)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-10-13
Audit: 370735
Auditor: Aprio LLP

AI Summary

  • Core Issue: The Authority failed to maintain proper documentation for tenant eligibility, with 10 out of 40 files lacking necessary support.
  • Impacted Requirements: Eligibility determinations were not adequately supported, risking compliance with program standards.
  • Recommended Follow-Up: Provide additional training for staff on the importance of documentation and consider implementing an electronic filing system for better organization.

Finding Text

Criteria: The PHA is required to maintain support of eligibility determinations that were made so support the individual program participants were determined to be eligible, and that only eligible individuals or groups of individuals participated in the program. Condition: During the year, 40 of the 4,026 tenant receipts that were received by the Authority were tested to determine if proper eligibility was determined for the program. Of the forty (40) tenant files reviewed, one (1) tenant file was missing the annual recertifcation and supporting documentation and seven (9) additional tenant file lacked the various supporting documentation. Questioned Costs: Not Determinable Cause: Staffing changes and overall turnover at the Authority was the reason for disorganization of the tenant files and the misplacement of the file selected for testing. Effect: The Authority does not have proper support to verify tenant is properly eligible for the program. Recommendation: The Authority should provide additional training to Public Housing staff to make sure the importance of tenant files and the related supporting documents related to the eligibility of program participants is readily available. Also, the Authority should consider if an electronic filing system would be to the benefit of the authority. Response: The Authority agrees with the finding is taking key actions to enhance controls related to eligibility and rent eligibility. This includes but not limited too revisiting a consulting proposal for an operational audit, completing recent staff training in rent calculations, completing a full internal file review with a compliance checklist, and evaluating an electronic document management system.

Corrective Action Plan

Corrective Action Plan & Response: RCRHA concurs with this finding and is taking comprehensive steps to address the issue and prevent recurrence. Specifically: 1. Revisiting AMA Consulting Group Proposal:_x000B_RCRHA is in the process of revisiting a formal proposal previously received from AMA Consulting Group, LLC, which outlines a detailed "Agency Health Check" for our Public Housing program. This proposal includes: • An operational audit of tenant files and eligibility documentation • Process mapping to improve workflow and accountability • Quality control implementation • Recommendations for electronic file storage and ongoing compliance monitoring.Engaging AMA is part of our long-term strategy to modernize internal operations and improve compliance. 2. Recent Staff Training: Nan McKay Rent Calculation Course:_x000B_To immediately address gaps in eligibility documentation practices, RCRHA staff participated in the Nan McKay HCV and Public Housing Rent Calculations Course in Washington, NC._x000B_The three-day seminar provided comprehensive instruction in: • Income and asset verification under 24 CFR Part 5 • Adjusted income and allowable deductions • Total Tenant Payment (TTP) calculations for both HCV and Public Housing • Case study applications using HUD Form 50058.3. Internal File Review and Compliance Checklist Implementation:_x000B_RCRHA has initiated a review of all active Public Housing tenant files to ensure that required eligibility documents are present, accurate, and properly stored. A standardized checklist is being introduced to guide staff and ensure uniform compliance across all tenant records. 4. Electronic File System Evaluation:_x000B_In alignment with HUD best practices and our consultant's recommendation, RCRHA is evaluating the feasibility of transitioning to an electronic document management system to ensure long-term retention, audit readiness, and streamlined access to eligibility documentation. 5. Revised Calendar: RCRHA has revised their audit calendar that will begin no later than October following the fiscal year. Internal accounting has been briefed on the matter and will have additional oversight in place to monitor that audit timelines. The Board of Commissioners will monitor audit timelines and reporting schedules. 6. SEFA Preparation: There will be detailed cross walks performed by CFDA numbers that include program specific reporting requirements. Internal accounting will receive additional training in federal grant reporting and a review will be performed by the CEO and a second-level review will be performed by the external accounting consultant.RCRHA is committed to addressing the current findings with a multi-layered response that strengthens documentation procedures, promotes staff competency, and enhances our operational efficiencies.

Categories

HUD Housing Programs Eligibility

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $2.53M
14.850 Public Housing Operating Fund $1.93M
14.182 Lower Income Housing Assistance Program_section 8 New Construction/substantial Rehabilitation $784,983
10.415 Rural Rental Housing Loans $196,402
14.871 Section 8 Housing Choice Vouchers $152,056
10.427 Rural Rental Assistance Payments $121,445