Finding Text
Finding 2025-001 - Moving To Work Demonstration Tenant Files - Eligibility - Internal Control over Tenant Files - Noncompliance and Significant Deficiency Moving To Work Demonstration - Subsidy ALN 14.881 Condition & Cause: During the review of 60 tenant files from the Moving to Work (MTW) program, 9 files (15%) were found to be noncompliant in one or more key compliance areas. Specifically, 5 files contained errors in income verification or calculation, and 5 files lacked documentation of an annual unit inspection. The noncompliance can be attributed to staff turnover during the audit period and lack of oversight. As a mitigating action, the Agency implemented an internal quality control review process in December 2024. Based on extrapolation of the identified issues, we estimate Likely Questioned Costs to be $38,139, representing approximately 0.6% of combined dwelling rental revenue and HAP expenses. This amount is immaterial to the financial statements. Criteria: Relevant compliance requirements can be found in Title 24 of the Code of Federal Regulations (CFR), the Agency's Admissions and Continued Occupancy Policy (ACOP), Administrative Plan, MTW Plan, and specific HUD guidelines for documenting and maintaining tenant files under the Public Housing and Housing Choice Voucher programs. Effect: Failure to properly verify and calculate annual income can lead to incorrect rent determinations, potentially causing overpayments or underpayments and contributing to financial misstatements. Additionally, missing documentation of annual unit inspections undermines the program's goal of ensuring safe, decent, and sanitary housing. Ongoing noncompliance may also trigger heightened regulatory oversight. Recommendation: We recommend that the Agency continue to enhance its quality control review procedures over tenant file management and closely monitor this area to promptly detect and correct errors. Additionally, the Agency should consider providing comprehensive or refresher training on HUD regulations to relevant staff. Questioned Costs: $38,139 Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.