Finding Text
Finding 2025-001 Program Name: Moving to Work (ALN #14.881) Federal Awarding Agency: Department of Housing and Urban Development Compliance Requirement: Eligibility Type of Finding: Material Weakness; Material Noncompliance Qualification Criteria: HUD regulations require certifications to be completed and entered timely to ensure accurate calculation of Housing Assistance Payments (HAP), Total Tenant Payment (TTP), and utility reimbursements. Condition: Of the 60 Moving to Work files tested, the following items were noted: - 40 instances of certifications not completed timely - 6 instances where the file did not contain income support - 3 instances where housing quality standards inspections were not completed within the last 2 years - 1 instance in which a rent comparison was not completed for a new move in Cause: The housing authority does not have sufficient controls or monitoring procedures to ensure certifications are processed before their effective date. Effect: The Authority was not in compliance with the eligibility compliance requirements for the year ended June 30, 2025. Failure to perform income recertifications and errors in calculating deductions and allowances could result in improper housing assistance payments. Auditor Recommendation: Implement a process to track upcoming certifications and assign responsibility to specific staff for monitoring deadlines. Additionally, perform periodic reviews to confirm certifications are completed and entered prior to their effective date. Questioned Costs: Potential questioned costs exist; however, the amount was not determinable at the time of audit. Management’s Response: LMHA continues to work through issues around the proper and timely processing of program certifications to support accurate Housing Assistance Payments, Total Tenant Payments and utility reimbursements. Currently, recertifications are processed on a biennial basis schedule, through a three-tiered system outlined in our updated MTW plan. This will address timeliness of recertification while also ensuring compliance and review of supporting documentation. Please note the following rules tied to LMHA’s three-tiered recertification system: 1) When the family is zero income, they will go to an annual recertification. 2) When family is working, (enrolling in KTAP (Kentucky Transitional Assistance Program), receiving Child Support, and other similar sources of income) they will go to a biennial recertification. 3) When a family has fixed income, (receiving Social Security, Supplemental Security Income, and/or Pension payments), they will go to a triennial recertification. The HCV Team is also working with Yardi (ERP system) to maximize the reporting and monitoring of the recertification schedule. The manager initiates the tracking for needed processing and possible termination of participants. With the three-tiered system, staff will be able to review all tenant information closely during recertifications to ensure proper housing assistance payments. Additionally, to improve sufficient controls and internal monitoring, the HCV Team is partnering with the Compliance Team to review tenant files for errors and improper supporting documentation.