Finding Text
2025-003 U.S Department of Housing and Urban Development – ALN #14.871/14.879 Housing Choice Vouchers Cluster Applicable Federal Award Number and Year – HCV2025 Special Tests and Provisions – Housing Assistance Payment Significant Deficiency in Internal Control over Compliance and Immaterial Instance of Noncompliance Criteria: The Authority is required to comply with U.S. Department of Housing and Urban Development (HUD) requirements for the Housing Choice Voucher program, including accurately determining tenant income in accordance with 24 CFR Part 5. Proper income determinations are essential to ensure housing assistance payments (HAP) are calculated correctly. Condition: The Authority did not accurately calculate tenant income in all instances tested, resulting in incorrect HAP disbursements. Cause: Internal controls over the income determination process, including verification and review of supporting documentation and calculations, were not operating effectively. Effect: As a result, HAP disbursements were improperly calculated. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 60 HAP disbursements were selected for testing from a population of over 250, which accounted for $103,540 of $48,444,177 of federal program expenditures. 3 out of the 60 disbursements tested contained errors related to incorrect income determinations. Repeat Finding from Prior Year: No. Recommendation: We recommend the Authority strengthen internal controls over the income determination process by enhancing review procedures, ensuring proper verification of income documentation, and providing additional training to personnel responsible for eligibility determinations. These procedures should include a documented secondary review to ensure compliance with HUD requirements prior to the calculation and approval of housing assistance payments. Views of Responsible Officials: Management agrees with the finding.