Finding Text
Finding 2025-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – E. Eligibility Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: 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). Determine income eligibility and calculate the tenant's rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq.) and 24 CFR Subpart C sections 960.253, 960.255, and 960.259). 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 failed to properly calculate the tenant's rent payments using documentation from third party income verification. Context: There are approximately two hundred forty one (241) Public and Indian Housing Program units. Of a sample size of thirteen (13) tenant files, the Authority failed to properly calculate the rent payments of three (3) tenants by not utilizing documentation from third party income verification. Our sample size is statistically valid. Known Questioned Costs: $27,188 Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the calculation of rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Public and Indian Housing Program is in material non-compliance with the eligibility type of compliance related to the calculation of rent. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.