Section 8 Housing Choice Voucher Program-CDFA #14.871, Low Rent Program-CDFA#14.850 2024-002-Administration of the Homeownership Program and FSS Programs Need Improvement-Special Tests Criteria and Specific Requirement The Low Rent Program and the Housing Choice Voucher Program both participate in the FSS programs. Federal regulations dictate how the FSS program should work. Enrollees have a choice of goals to accomplish and thus graduate with FSS funds. The Authority should keep documentation that the FSS program was offered to all new participants. In addition, the Homeownership program was established years ago from excess Admin fees of the HCV program, when this was still permitted from pre-2004 Admin fees. An escrow “major repair or replacement” account was maintained for each participant, with the authority calculating monthly additions based on formula. If participants presented documentation of major expenditures or additions, they could be reimbursed from the established escrow accounts. An audit finding has existed for years that neither the FSS or Homeownership programs were being properly administered. Condition Found FSS A recently hired case worker is adequately tracking three participants in the program. However, two participants have graduated. They should be notified that they are due funds if they elect to draw them now. The liability to the two tenants at September 30, 2024 is a total of $3,976. In addition, there is no documentation in the files that recent new people to the program were made aware that if they chose to, they could participate in the program Homeownership For the last several years, the various E.D.s have asserted that they were behind in updating the status of Homeownership participants. They provided no lists of enrollees. However, in the current audit period, a case worker has found a list dated September 30, 2015 of 13 participants. A review has found an additional enrollee. The review has determined that of the 14 total, 6 are no longer on the program. The status of the other eight is presently not known. Cause All of the reasons, perhaps even the principal reason, are not known for the inadequate administration. However, case worker turnover and lack of training is partly responsible. In addition, management has not been diligent in overseeing these programs. Effect Two of the effects are that federal regulations for FSS and the Authority -established Homeownership policy have not been complied with. Recommendation FSS It appears that the current case workers overseeing the FSS programs are adequately tracking the enrollees. However, documentation in writing should be obtained that the two tenants eligible for funds should be notified. In addition, for all future move-ins, and at least at time of annual renewal, documentation should be obtained that all participants are informed that they are eligible for the FSS program. Finally, a quality control check by someone other than the two caseworkers needs to be documented. Or, each case worker can check the other and document this check. Homeownership (a)-The board’s adopted, original policy is no longer available. In addition, due to the comingling of funds, inadequate accounting and perhaps other reasons, the original amount of money contributed to the program, and any remaining funds is not known. Due to these factors, the Authority should consider the program to have been suspended and/or terminated as of September 2015. This is the date of the last participant update recently found by the case worker, as noted in Condition Found, noted above. (b)-Of the 8 participant files that are open, as noted in Condition Found, a review for participant contracts should be made. Since 7 of the files have been ported out to the El Paso Housing Authority, likely arrangements will need to be made for an Anthony case worker to review the files in El Paso. (c)-If any contracts are found, they should be carefully reviewed by the case worker and also management, and furnished to the auditor of the applicable audit year. (d)-For any of the 8 participants with properly executed contracts, the Authority should consider adding interest to the September 30, 2015 escrow balance of 3% per annum from October 1, 2015 through the most recent date. (e)- The participant with contracts should be notified in writing of their escrow balance. Since the EPHA now handles these tenants, communications will need to worked out. The participants should be informed that for major expenditures or additions (or other expenses, as determined by the board, as long as they are consistently applied) they can be reimbursed Our recommendation could vary from the above, depending on what the terms of the original participant agreement says, if such an agreement is found. Also, HUD or legal counsel, if sought, may have other recommendations. View of Responsible Officials We will review all of the above at our next board meeting. But initially, I agree with the above recommendations.