Finding Text
PBRA/MOD – Vacant Units Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project-Based Cluster Assistance Listing Number: 14.195/14.857 Federal Award Identification Number and Year: MD004 (various funding increments active during period 7/1/24 - 6/30/25) Award Period: July 1, 2024 through June 30, 2025 Type of Finding: - Significant Deficiency in Internal Control over Compliance. - Other Matters Criteria: The PHA or owner must reduce claims for assistance on vacant units under certain circumstances. However, there are instances where special claims are allowed for vacancy losses, unpaid rent, and tenant damages on eligible units (24 CFR sections 880.611, 881.601, 882.411, 882.808(f), 883.701, 884.106, 886.109, and 886.309). Condition: During our testing, we noted the Authority did not have adequate internal controls designed to ensure that vacancies were appropriately accounted for in HUD-52670 forms, and that HAP activity in the HAP registers correctly reflected the vacancies. Questioned Costs: $ 352 Context: Testing of 8 files resulted in exceptions in 1 file: - 1 case in which the HAP activity recorded to the HAP registers did not match with the timespan of the tenant vacancy observed in separate documentation. Cause: The Commission does not have internal controls in place to ensure it is meeting program requirements over vacant units. Effect: The Commission is not in compliance with program requirements over vacant units. Repeat Finding: Not a repeat finding. Recommendation: The Commission should implement processes to ensure that vacancies are appropriately accounted for in the HUD-52670's, within HAP registers, and other relevant records. View of Responsible Officials: There is no disagreement with the audit finding.