Finding 1211194 (2025-009)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2026-05-01
Audit: 400421
Organization: Municipality of Santa Isabel (PR)

AI Summary

  • Core Issue: Many participant files are missing essential documents, including applications, birth certificates, and income verifications.
  • Impacted Requirements: Compliance with HUD regulations for annual income reexaminations and documentation of third-party verifications is not being met.
  • Recommended Follow-Up: Implement a checklist to ensure all required documents are present in participant files and improve internal controls for file management.

Finding Text

Section 8 Voucher 2025-009 Eligibility ALN No. 14.871 Statement of Condition: As part of our eligibility test for participant, we selected 22 participant’s files. The following deficiency was noted during our examination. - In 9 (41%) of participant files examined the program application was not present in files. - In 7 (32%) of participants files examined the birth certificates were not present in files. - In 4 (18%) of participants files examined the social security were not present in files. - In 22 (100%) of participants files examined the Rent Reasonableness Certification were not present in files. - In 6 (27%) of participants file examined the bank account and assets certification were not present on files. - In 7 (20%) of participants file examined the enterprise income verification (eiv) were not present on files. - In 2 (9%) of participant file examined the authorization for release of information were not present on file. NONE Criteria: The PHA must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third-party verification. Except as provided in paragraph (a)(3) of this section, 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; and Program Findings/Noncompliance Recommendations Questioned Cost (iv) Other factors that affect the determination of adjusted income. (24 CFR section 982.516). A PHA that administers a Section 8 or public housing program under an Annual Contributions Contract with HUD must carry out background checks necessary to determine whether a member of a household applying for admission to any federally assisted housing program is subject to a lifetime sex offender registration requirement under a State sex offender registration program. This check must be carried out with respect to the State in which the housing is located and with respect to States where members of the applicant household are known to have resided. (24 CFR 5.905 Cause and Effect: This condition arose because the Municipality has not implemented specific internal controls and procedures designed to minimize the errors when performing the annual family reexaminations. Recommendation: The Project Administrator should improve existing procedures to ensure the completeness of the participants files. The Municipality should implement a checklist in order to verify participant files completeness of required documents and forms.

Corrective Action Plan

Instructions will be given to the Program staff to continue strengthening the existing internal controls and procedures to ensure that the re-examinations and HAP determination processes are performed according to program requirements and guidelines. Also, the Program staff should obtain in a timely manner all the required documentation for each reexamination executed. Implementation Date: June 30, 2026 Responsible Person: Mrs. Janice Brugman Federal Program Director

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1211195 2025-010
    Material Weakness Repeat
  • 1211196 2025-011
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $1.14M
93.575 CHILD CARE AND DEVELOPMENT BLOCK GRANT $1.04M
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $645,741
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $361,079
93.569 COMMUNITY SERVICES BLOCK GRANT $115,818
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $44,508
20.507 FEDERAL TRANSIT FORMULA GRANTS $44,000
10.558 CHILD AND ADULT CARE FOOD PROGRAM $5,480