Finding Text
2025-007 ALN 14.850 – Public Housing Operating Fund – Eligibility – Other Condition and Criteria: In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit compliance requires that for tenant eligibility, tenant files include certain information and documentation that is both accurate and complete such as to obtain and document third-party verification of annual income and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the rent payment using this documentation. Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility. During our audit, it was determined that internal control deficiencies over compliance existed over the Authority’s Public Housing Operating Fund program eligibility determination process. The Authority's staff had inadequate internal controls over the Authority’s Public Housing Operating Fund tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. We noted that 100% of the files tested had issues relating to missing third-party verification of income or deduction sources, missing or improperly filled out HUD required forms, missing move-in and annual inspection forms, or lack of rent choice forms. We determined that these internal control deficiencies and resulting noncompliance appeared to be consistent and prevalent among the Authority's tenant files. Amount of Questioned Costs. None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 25 of these tenant files did not either have an EIV report, signed Declaration of Section 214 Status, move-in and annual inspections, or lack of rent choice forms. Cause: The Authority’s staff's internal controls over the eligibility determination process that were in place lacked the necessary controls over information and communication of HUD regulatory requirements to properly follow HUD’s eligibility requirements as determined by 24 CFR. There appears to be a lack of quality control procedures in place regarding the monitoring of tenant files in order to catch inaccurate and/or incomplete required tenant eligibility documentation and rent calculations. Effect or Potential Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. Auditor’s Recommendation: In general, we recommend that the Authority review documentation requirements regarding tenant files. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. We also recommend that Authority staff to obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or changed to the public housing industry. Grantee Response: Management acknowledges the finding and will follow the auditor’s recommendation.