Finding 1165294 (2025-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2025-12-18

AI Summary

  • Core Issue: Twelve out of thirty tenant files showed noncompliance with income verification and documentation, leading to potential rent calculation errors.
  • Impacted Requirements: Violations of HUD regulations and the Agency’s policies on income determination and annual inspections increase risks of financial misstatements and health issues.
  • Recommended Follow-Up: Improve quality control, conduct regular internal reviews, and provide staff training to ensure compliance with HUD requirements.

Finding Text

Finding 2025-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance and Material Weakness Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of thirty (30) Low Rent Public Housing tenant files identified noncompliance in twelve (12) files within one or more categories. Of these, eight (8) files, or roughly 26%, were for the determination of adjusted annual income. Specifically, we noted the following: • Three (3) files were missing proper income verification • Three (3) files included income miscalculations • Two (2) files lacked required documentation to support deductions • Five (5) units did not have evidence of an annual inspection on file Based on extrapolation of these errors to the population, we identified likely questioned costs totaling $134,699, representing approximately 3.25% of total dwelling rental income. We also observed that the Public Housing department operated with significant staffing shortages for much of the fiscal year, which likely contributed to these deficiencies. Criteria: HUD regulations (24 CFR § 5 and § 960) and the Agency’s Admissions and Continued Occupancy Policy (ACOP) require accurate and properly supported rental charge determinations and annual unit inspections. Effect: The lack of proper income verification, calculation errors, and missing deduction support may result in incorrect rent charges and misreported income, increasing the risk of financial misstatement and noncompliance with HUD requirements. The absence of documented annual unit inspections could result in health and safety issues going unaddressed and may expose the Agency to liability. Recommendation: We recommend that the Authority enhance its quality control procedures to ensure compliance with HUD income determination regulations and annual unit inspection requirements. Regular internal reviews and staff training should be conducted to address these compliance issues effectively. Questioned Costs: $134,699 Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Corrective Action Plan

Finding 2025-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of thirty (30) Low Rent Public Housing tenant files identified noncompliance in twelve (12) files within one or more categories. Of these, eight (8) files, or roughly 26%, were for the determination of adjusted annual income. Specifically, we noted the following: • Three (3) files were missing proper income verification • Three (3) files included income miscalculations • Two (2) files lacked required documentation to support deductions • Five (5) units did not have evidence of an annual inspection on file Based on extrapolation of these errors to the population, we identified likely questioned costs totaling $134,699, representing approximately 3.25% of total dwelling rental income. We also observed that the Public Housing department operated with significant staffing shortages for much of the fiscal year, which likely contributed to these deficiencies. PHA Response: The SHA has reviewed these deficiencies with the responsible staff members. Public housing staff have received internal training on required and acceptable income and deduction verifications and subsequent calculations. A file integrity checklist has been created for housing managers to ensure all required forms, calculations and required support is included and accurate. Further, internal file review procedures will be established in the current fiscal year. File integrity reviews will be performed by the Division Director and SHA is also exploring the value of peer reviews between housing managers and support staff. Internal inspection processes have also been improved. SHA has created a new Director of Operations position that is responsible for oversight and scheduling of inspections. This will provide more direct oversight of unit inspections and ensure that all annual and other inspections are performed timely and resulting reports are provided to the housing manager for the resident file. Persons Responsible: Lisa Taylor, Director of Admissions, Occupancy and Compliance Anticipate Completion Date: March 31, 2026

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1165295 2025-003
    Material Weakness Repeat
  • 1165296 2025-003
    Material Weakness Repeat
  • 1165297 2025-001
    Material Weakness Repeat
  • 1165298 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $27.08M
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $3.69M
14.850 PUBLIC HOUSING OPERATING FUND $2.98M
14.879 MAINSTREAM VOUCHERS $2.48M
14.872 PUBLIC HOUSING CAPITAL FUND $2.40M
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $191,984
14.249 SECTION 8 MODERATE REHABILITATION SINGLE ROOM OCCUPANCY $127,551
14.870 RESIDENT OPPORTUNITY AND SUPPORTIVE SERVICES - SERVICE COORDINATORS $39,691