Finding 1191504 (2025-001)

Material Weakness Repeat Finding
Requirement
ELN
Questioned Costs
-
Year
2025
Accepted
2026-03-27

AI Summary

  • Core Issue: The Authority failed to maintain required documentation for tenant eligibility and income qualification.
  • Impacted Requirements: Non-compliance with 2 CFR regulations regarding tenant documentation, recertifications, and reporting.
  • Recommended Follow-Up: Enhance policies and controls to ensure all necessary documentation is collected and retained properly.

Finding Text

Criteria: Per 2 CFR, PHAs are required to obtain documentation declaring the tenant is eligible to receive federal housing benefits, obtain release forms from tenants to gather necessary information from third parties, and perform annual recertifications of tenant income through HUD Form 50058. Condition: The Authority was unable to provide declarations of eligible status, signed release forms, documented HQS inspections, and utility allowance calculations. Furthermore, the Authority did not provide documented income qualification to determine tenant’s rent amount. Context: Out of the 40 tenant files reviewed, we found the following exceptions: 5 files did not have proper declaration of eligible status 15 files did not have updated signed release forms or HQS inspections performed 7 files were not submitted on time and 9 files did not have income qualification 18 files did not have rent reasonableness determination 9 files did not have proper utility allowance calculations Effect: The Authority was not in compliance with the eligibility, reporting, and special tests and provisions requirements for the program. Cause: The Authority did not have the proper controls in place to ensure the files were complete and accurate. Repeat Finding: This is not a repeat finding. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure the recertifications are performed and the necessary documentation is adequately retained in the Authority’s files. Views of Responsible Officials: The Authority agrees with the finding.

Corrective Action Plan

Corrective Action Plan: The Authority acknowledges the finding. Corrective actions to address the deficiencies are underway and include: Updating internal policies and procedures related to Housing Choice Voucher (HCV) program compliance, including tenant eligibility, income verification, rent reasonableness, utility allowance calculations, and documentation requirements; Providing targeted staff training on HUD HCV program requirements, including proper file documentation, income calculation, and timely completion of annual and interim recertifications; Implementing a mandatory file checklist to ensure all required documentation is obtained, reviewed, and verified prior to finalizing tenant certifications and rent determinations; Establishing a formal quality control process in which supervisory staff perform periodic file reviews to ensure compliance with HUD requirements and internal policies; Conducting a comprehensive review and cleanup of all HCV tenant files to identify and correct missing or incomplete documentation, including income verification, inspections, and rent calculations; Maintaining an audit trail of all verification documentation to ensure proper retention and support for tenant eligibility and rent determinations; Implementing tracking tools and system reports to monitor recertification due dates, inspection schedules, and file completion status to ensure timely compliance; Continuing engagement with third-party service provider, Quadel, to assist with tenant file documentation compliance, backlog recertifications, and rent calculation accuracy; Hiring and/or assigning additional staff, including HCV program leadership and specialists, to strengthen oversight, ensure timely processing of recertifications, and maintain compliance with HUD requirements.

Categories

HUD Housing Programs Special Tests & Provisions Eligibility Reporting

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $11.26M
14.850 PUBLIC HOUSING OPERATING FUND $2.69M
14.872 PUBLIC HOUSING CAPITAL FUND $1.77M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $188,262
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $106,869
14.870 RESIDENT OPPORTUNITY AND SUPPORTIVE SERVICES - SERVICE COORDINATORS $102,430
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $94,868