Finding 1221657 (2025-001)

REFERENCE NUMBER: 2025-001 FEDERAL PROGRAM: Section 8 Housing Choice Vouchers ASSISTANCE LISTING NUMBER: 14.871 NAME OF FEDERAL AGENCY: U.S. Department of Housing and Urban Development (HUD) COMPLIANCE REQUIREMENT: Reporting/HUD tenant data submissions, including PIC-related reporting REPEAT FINDING: No Criteria Under the Uniform Guidance, the auditor is required to perform procedures to determine whether the auditee complied with federal statutes, regulations, and the terms and conditions of federal awards that may have a direct and material effect on each major program. 2 CFR § 200.514(d) requires the auditor to perform transaction tests and other audit procedures necessary to determine compliance for each major program. The OMB Compliance Supplement is the mandatory framework for identifying compliance requirements subject to audit. The Section 8 Housing Choice Voucher program is administered by public housing authorities under an Annual Contributions Contract with HUD and is governed by HUD regulations at 24 CFR parts 5 and 982–985. Reporting requirements may be material when they support a recipient’s entitlement to HUD assistance, including tenant certifications and HAP-related reporting. Condition During our testing of tenant files for the Section 8 Housing Choice Voucher major program, we selected a sample of 3 tenant files from a population of 24 tenant files / voucher participants for the fiscal year ended September 30, 2025. We noted that 2 of the 3 tenant files tested did not have evidence that required PIC submissions were completed. Questioned Costs - None No questioned costs were identified as a direct result of this finding because the exceptions related to missing evidence of required PIC submissions rather than identified unsupported HAP payments. However, questioned costs are subject to change if additional procedures identify unsupported or ineligible payments related to the affected tenant files. Cause The Authority did not appear to have adequate procedures in place to ensure that required PIC submissions were prepared, reviewed, and submitted timely for all applicable tenant actions. In addition, the Authority’s review controls over tenant file completion did not identify the missing PIC submissions before the files were selected for audit. Effect Failure to complete required PIC submissions may result in inaccurate or incomplete reporting of tenant and voucher activity to HUD. Incomplete PIC reporting may affect HUD’s monitoring of the Housing Choice Voucher program and may impair the Authority’s ability to demonstrate compliance with applicable HUD reporting requirements. Because reporting requirements can be directly related to HUD assistance and HAP-related reporting, noncompliance could be material to the major program depending on the nature and extent of the errors Recommendation We recommend that the Authority strengthen its procedures over PIC submissions by: • Maintaining a tracking log of all required PIC submissions, including the tenant action type, effective date, due date, submission date, and confirmation of acceptance. • Requiring supervisory review of tenant files to verify that PIC submissions have been completed and retained in the file. • Performing periodic reconciliations between tenant file activity and PIC submission records. • Providing refresher training to staff responsible for tenant file processing and HUD reporting requirements. • Implementing a corrective review of tenant files processed during the audit period to determine whether additional PIC submissions were missed and to submit or correct any outstanding items, as applicable. Management’s response: The Authority agrees with the finding. Management will implement additional controls, monitoring procedures, and supervisory review requirements to ensure PIC/HUD-50058 submissions are prepared, submitted, and retained timely and completely for all tenant actions.