Finding Text
Finding 2025-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Project-Based Cluster - Project Based Rental Assistance Federal Assistance Listing Numbers: 14.195 Noncompliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR section 5.233). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately one hundred eighty eight (188) Project Based Rental Assistance units. Of a sample size of twelve (12) tenant files, five (5) tenants' HUD-50059 forms included income that was unsupported or included income that was miscalculated during their annual reexamination. Our sample size is statistically valid. Known Questioned Costs: Amount is below threshold of $25,000. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Project Based Rental Assistance program is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.