Finding Text
Finding: 2025‐003 U.S. Department of Housing & Urban Development Program Name: Section 8 Housing Voucher Cluster AL Number: 14.871 Material Non‐Compliance Material Weakness Special Tests and Provisions Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that applicants have all required documentation in their file. In accordance with 24 CFR Part 5 Subpart F, the City must maintain documentation to support tenant eligibility. In accordance with 24 CFR sections 960.202 through 960.208, the City must establish, adopt, and follow policies for admission of tenants as it relates to the Public Housing waiting list. All families admitted to the program must be selected from the waiting list. In accordance with 24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507, the PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent. Condition: The Public Housing Department did not follow procedures to ensure the waiting lists and reasonable rent were made and documented. Context: Of the 6 new participants during the current year valued at $33,340, we examined 2 (valued at $13,590) and determined that 2 (100%) that the case file was missing documentation to support that the rent to the owners were reasonable and that the tenant was selected from the waiting list. Effect: Owners could receive benefits for which they are not eligible. Cause: Weakness in implementation of controls over special tests and provisions procedures. Due to the turnover in the housing department, the City failed to obtain or retain the completed documentations required. Identification of a Repeat Finding: This is modified and a repeat Finding of 2024-002 from the immediate previous audit. Questioned Cost: The finding represented an internal control weakness; therefore, no questioned costs are applicable. Recommendation: Management should adhere to the program’s policy and maintain proper eligibility documentation in the applicant’s file. Views of Responsible Officials and Planned Corrective Actions: The City agrees with this finding. Please refer to the Corrective Action Plan section of this report.