Finding 1186892 (2025-001)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2026-03-26
Audit: 394668
Organization: Rockport Housing Authority (MA)
Auditor: CBIZ CPAS PC

AI Summary

  • Core Issue: The Public Housing Authority (PHA) is not properly verifying tenant income and expenses, leading to potential miscalculations in rent and housing assistance payments.
  • Impacted Requirements: The PHA must conduct annual reexaminations and obtain third-party verification for income and asset factors as per HUD regulations.
  • Recommended Follow-Up: Provide training to staff on reexamination procedures to ensure compliance and accuracy in tenant assessments.

Finding Text

2025-001 – ELIGIBILITY Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development CFDA #: 14.871 – Housing Voucher Cluster CRITERIA PHA responsibility for reexamination and verification. (1) The PHA must conduct a reexamination of family income and composition at least annually. (2) The PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available. (i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; Other factors that affect the determination of adjusted income. (24 CFR 982,516) CONDITION As a result of our audit procedures, we identified the following exceptions in our testing: > Three (3) instances of income, asset or medical expense miscalculation or insufficient verification > Two (2) instances of the incorrect payment standard being used CAUSE The Authority experienced turnover in the administrative department. EFFECT The Authority is potentially incorrectly calculating and adjusting tenant rent and housing assistance payments. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 16 from a population of 157 program participants. This was not a statistically valid sample. REPEAT FINDING Repeat of finding 2024-001. RECOMMENDATION We recommend the Authority provide training for the performance of reexamination procedures. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Corrective Action Plan

2025-001 - ELIGIBILITY Auditee’s Response and Planned Corrective Action Rockport Housing Authority (RHA) contracted with Newburyport Housing Authority (NHA) to manage the Section 8 program. They will be calculating income, assets and/or medical expenses based on HUD regulation. NHA is staffed with an experienced Section 8 Coordinator. In addition, NHA uses Rent O Meter to provide Rent Reasonableness Reporting that will be entered into PHA Web as a method of recording. Planned Implementation Date of Corrective Action: June 30, 2026 Person Responsible for Corrective Action: Marie Mathas, Executive Director

Categories

HUD Housing Programs Eligibility Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $2.86M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $42,440