Finding Text
Finding 2025-008: Section 8 Housing Choice Voucher Program, Federal Assistance Listing #14.871 Compliance Requirement – Eligibility, Special Tests and Provisions over HQS Quality Control Re-Inspections and Utility Allowance Schedule Material Weakness/Noncompliance Criteria: The Authority has entered into an annual contributions contract (ACC) with HUD to administer the Section 8 Voucher Program in accordance with HUD regulations and requirements §982.151. Along with the various compliance requirements required, the Authority should have controls in place over the compliance requirements. In the ideal situation, duties related to program compliance would be segregated so that noncompliance can be prevented or detected. Condition: During our audit we noted material weaknesses in the internal controls over compliance requirements as well as instances of noncompliance. These are summarized below by requirement: • Eligibility – During our audit of Section 8 participant files we noted the Section 8 files are primarily maintained by one person and there is no review or any evidence of any documentation such as a checklist to indicate there was a review process. This could lead to material noncompliance related to Eligibility. • 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 is performing the initial unit inspection but does not have a quality control re-inspection procedure in place. All of the inspections were completed by the Section 8 Coordinator but no re-inspection was being performed. • Utility Allowance Schedule – According to CFR 982.517, the Authority must maintain an up-to- date utility allowance schedule. The Authority must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised. During our audit we noted the Authority did not maintain any documentation to support that the review of the utility rate data had been reviewed and that that utility allowance schedule had been based on any supporting data other than that deemed necessary by the Authority. Cause: The Authority has not performed an analysis of possible risk in relation to various compliance requirements and has not documented the internal controls. Effect or Potential Effect: The lack of segregation of duties related to the controls over the categories above are considered material weaknesses that result in noncompliance. 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 procedures to prevent noncompliance with federal program requirements. View of Responsible Official: Management agrees with the Finding.