Finding Text
Finding 2025-002: Eligibility – Untimely Recertifications - Significant Deficiency Condition: During testing of tenant files, the auditor noted fourteen instances where the 2025 annual recertifications were not done timely. Recertifications were performed in the subsequent year, and the effective dates were backdated to reflect the current year. Criteria: The Company must administer the HAP contract in compliance with federal regulations. Annual tenant recertifications must be conducted annually and timely in accordance with 24 CFR § 982.516, with effective dates properly aligned to the tenant anniversary date. Backdating of effective dates is not permitted. The Company must ensure documentation in tenant files supports the rent and subsidy amounts reported to the public housing authority. Effect: The lack of timely recertifications increases the risk of inaccurate rent and housing assistance payments (HAP), improper HAP disbursements, and potential questioned costs. Cause: Inadequate internal controls and oversight over the tenant file and recertification process, including lack of timely monitoring and supervisory review. Recommendation: We recommend that management strengthen internal controls over tenant files by implementing a formalized tracking system for annual recertifications to ensure recertifications are completed timely and with correct effective dates. Supervisory review and approval procedures should be strengthened prior to finalizing tenant rent changes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. Management will implement a recertification tracking system with due date reminders and strengthen supervisory reviews to ensure all annual recertifications are completed timely with accurate effective dates.