Finding Text
Finding 2025-003: Internal Controls – Activities/Allowable Costs/Eligibility/Reporting/Special Tests and Provisions Section 8 Housing Choice Voucher Cluster Program, Assistance Listing #14.871 Material Weakness/Noncompliance Criteria: A properly designed internal control structure relies greatly on a proper segregation of duties between several individuals. In the ideal situation, duties related to program compliance would be segregated so that an instance of material noncompliance would be prevented or detected. Condition: The Authority consists of limited employees and as a result does not have personnel assigned responsibilities in such a way that different employees handle different parts of the compliance requirements. The lack of segregation of duties applies to all the compliance requirements of the Voucher program and we noted other specific areas of noncompliance: • HQS Quality Control – The Authority must perform a unit inspection in the Section 8 program and also conduct quality control re-inspections. During our audit we noted the Authority has a separate inspector and then the Director does the re-inspection. The Authority implemented a control log to document the units and respective dates of the inspections, however there is no documentation beyond this of the re-inspection performed. The Authority should complete and document the re-inspection checklist so this can be confirmed as part of the audit. Cause: The Authority has limited staff and does not have the resources to properly segregate duties in relation to various compliance requirements. Effect or Potential Effect: The lack of segregation of duties related to the controls over the categories above are significant deficiencies that result in material noncompliance will not be prevented or detected In addition, the Authority has not properly implemented HQS requirements. Recommendation: The Authority should review its controls over processes to determine which controls could be implemented in order to achieve a segregation of duties. The Authority should determine and document its internal control components and procedures to prevent noncompliance with federal program requirements. The Authority is able to implement an adequate control over the HQS Quality Controls and should review its process for this compliance requirement. View of Responsible Official: Management agrees with the Finding.