Finding Text
Finding 2025-002 – Public and Indian Housing Participant Files – Eligibility – Internal Control over Participant Files – Noncompliance and Material Weakness – Public and Indian Housing Program – ALN 14.850 Condition & Cause: We reviewed thirty-five (35) resident files for compliance with applicable program requirements and identified noncompliance in twenty-three (23) files, with some files containing multiple deficiencies. The following deficiencies were noted: • One (1) resident file could not be located • One (1) file was missing the documentation for the recertification that agreed to the rent roll • Eleven (11) files had annual reexaminations that were completed materially past due or were not completed as of the audit fieldwork date • Four (4) files had miscalculations of annual income • Three (3) files were missing proper income verification • Two (2) files were missing proper deduction verification • Eight (8) files were missing documentation that an annual unit inspection was conducted • One (1) file did not have an annual Application for Continued Occupancy • Three (3) files were missing the EIV report for the action in review • Two (2) files were missing a valid Authorization for Release of Information The noncompliance was primarily caused by prolonged staff vacancies and high turnover within the department during the audit period, which limited the Agency’s ability to complete, maintain, and retain required documentation in a timely and accurate manner. Criteria: The Code of Federal Regulations, Admissions and Continued Occupancy Policy, and specific HUD guidelines in documenting and maintaining participant files Effect: Failure to properly verify and calculate annual income, maintain required documentation, inspect units, and complete timely reexaminations can result in a misstatement of rental income leading to improper funding for the LIPH program. Misstatements of rent may also cause an undue financial burden to the participant which goes against the mission of the Agency. Persistent noncompliance can result in increased scrutiny from regulatory agencies or termination of program funding. Recommendation: We recommend that the Agency conduct a resident file audit of existing residents in the LIPH program to determine the extent of any additional misstatements of rent expense. We also recommend that the Agency increase their monitoring and quality control review of the LIPH program files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Questioned Costs: Based on extrapolation of known questioned costs, likely questioned costs are $66,512, or 2.6% of dwelling rental income. Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.