Finding Text
Housing Voucher Cluster Eligibility Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Numbers: 14.871 and 14.879 Federal Award Identification Number and Year: FL080; 2025 Award Period: October 1, 2024 to September 30, 2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Noncompliance (Other Matters) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR section 982.516). Condition: During testing of 60 tenant files, eligibility-related exceptions were identified in 3 files. • In 1 instance, the Form HUD-50058 in effect during fiscal year 2025 per Yardi was dated 2022. No recertification for the tenant had been performed since. As a result, key recent eligibility elements, including household composition, income, assets, expenses, eligibility determinations, and the accuracy of the HAP calculation, could not be verified. • In 2 instances, HAP payments continued after tenants had vacated the assisted units and were no longer participating in the HCV program (end-of-participation dates of November 2023 and December 2023). The Authority was using old tenant data and was still paying HAP to the landlords in fiscal year 2025. For both households, the Authority initiated retroactive billing to recover HAP payments made after the tenant vacated; however, as of the date of testing, the funds had not been recovered from one landlord. Questioned Costs: $10,633 Context: Out of 60 tenant files tested, 3 tenant files contained errors as noted above. Cause: The Authority had inadequate monitoring controls over (1) timely updates and recertifications in the tenant file, including Form HUD-50058, and (2) the timely termination of HAP payments upon tenant move-out. Effect: Failure to maintain valid eligibility documentation and discontinue HAP payments timely increases the risk of: • Unsupported eligibility determinations and inaccurate HAP calculations • Improper payments to landlords for ineligible participants, resulting in potential questioned costs and noncompliance with HUD requirements. • Inaccurate and untimely information reported to HUD Repeat Finding: This is a repeat finding from previous years. The finding numbers were 2017-001, 2018-001, 2019-001, 2020-001, 2021-001, 2022-001, 2023-001, and 2024-001. Recommendation: We recommend the Authority strengthen internal controls over tenant recertifications to ensure: • Form HUD-50058 and supporting eligibility documentation are current, complete, and properly maintained for all tenants • Timely processing of tenant move-outs and termination of HAP payments • Ongoing monitoring procedures to identify and promptly resolve instances of continued payments after program exit, including timely recovery of any overpayments Views of Responsible Officials: There is no disagreement with the audit finding.