Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Program Assistance Listing Number: 14.871 Award Period: 1/1/2021-12/31/2021 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Under 24 CFR § 982.516, Public Housing Agencies are required to conduct a reexamination of family income and composition at least annually. The PHA must make appropriate adjustments to the housing assistance payment (HAP) based on the updated information. Timely recertification is essential to ensure that HAP amounts are accurate and that program funds are used in accordance with federal requirements. Condition: During our testing we noted instances where the Authority did not follow the internal controls in place to ensure that HAP amounts are accurate and to ensure compliance with annual reexamination requirements. Questioned Costs: $6,553 Context: In 5 of the 40 files tested, the Housing Authority did not complete required annual reexaminations in a timely manner. In addition, the 5 of 40 files that did not complete annual recertification timely, had a HAP per the HUD-50058 that did not agree to the HAP register. As a result, housing assistance payments were made based on outdated information, leading to overpayments. Cause: The timing delays in annual reexaminations occurred during the height of the COVID-19 public health emergency, when the Authority was operating remotely under federal health guidance and prioritizing housing stability for vulnerable families. During this period, HUD issued temporary flexibilities and strongly encouraged PHAs not to terminate assistance due to delayed documentation or recertification hardships. Consistent with this national directive, the Authority focused on maintaining assistance for households experiencing pandemic-related employment, medical, transportation, and childcare challenges. These extraordinary operating conditions, combined with increased caseload needs and remote processing, resulted in several reexaminations being completed later than normally required, as well as incorrect HAP payments being made. Effect: The Authority is not in compliance with HUD regulations. Repeat Finding: No Recommendation: We recommend that the Authority should review their reexamination policies to ensure that all reexaminations are performed timely and that all necessary documentation is maintained for each reexamination. Views of Responsible Officials: The Authority concurs with this finding. During the audit period, operations were significantly impacted by the COVID-19 public health emergency. From March 2020 through July 2021, the Housing Authority was operating under remote conditions, and several federally issued COVID relief measures temporarily altered standard enforcement practices across the Housing Choice Voucher program. Notably, during this period Congress issued a federal eviction moratorium, and HUD provided guidance discouraging termination of assistance for late recertification and documentation delays when caused by pandemic-related hardships. Consistent with this guidance, the Authority did not terminate voucher participants for late reexaminations and made every effort to maintain housing stability for families. Additionally, the Authority’s administrative offices remained physically closed to the public through July 2021 to protect program participants and staff. During this time, the volume of remote processing increased substantially, which contributed to delays in receipt and verification of documentation needed to complete annual reexaminations. While these actions were taken in good faith to align with federal directives and support vulnerable households during the pandemic, the Authority acknowledges that several reexaminations were not completed timely, resulting in housing assistance payments based on outdated, and incorrect information.