Finding Text
Finding 2025-007: Eligibility Public Housing Program, Assistance Listing #14.850 Section 8 Housing Choice Voucher Cluster Program, Assistance Listing #14.871 Material Weakness Criteria – In accordance with the Public Housing Program regulations under 24 CFR Part 960 and the Housing Choice Voucher Program regulations under 24 CFR 982.201, housing authorities are required to establish and maintain procedures governing (1) eligibility determinations; (2) determination of income, rent, and Housing Assistance Payments (HAP); and (3) leasing and continued occupancy. These procedures are essential to ensure compliance with HUD program requirements. Condition – During our audit of tenant and participant files within the Public Housing and Housing Choice Voucher Programs, we noted no evidence of a supervisory review control being performed or documented. File processing and eligibility determinations appeared to be completed by a single individual without independent review. The absence of a supervisory review increases the risk that errors or noncompliance may not be detected in a timely manner. Cause – Although supervisory review procedures were reportedly in place in prior years, turnover in administrative personnel resulted in these controls not being consistently performed or documented. Management did not implement adequate procedures to ensure continuity of this key internal control. Effect or Potential Effect – The lack of supervisory review over tenant and participant files increases the risk of noncompliance with HUD eligibility requirements, including improper eligibility determinations, inaccurate rent calculations, and incorrect HAP payments. This could result in questioned costs, repayment obligations, or potential program sanctions. Recommendation – We recommend the Agency strengthen its internal control structure over tenant and participant file processing by implementing and documenting a formal supervisory review process. This review should be performed by a qualified individual independent of the preparer. Additionally, the Agency should establish procedures to ensure continuity of controls during staff turnover, including cross-training and written policies and procedures. View of Responsible Official: Management agrees with the Finding.