Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Award Identification Number and Year: WA001 - 2025 Award Period: January 1, 2025 through December 31, 2025 Compliance Requirement: Eligibility (LIPH) Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to Part 4 of the Compliance Supplement 2025 for the Moving to Work Demonstration Program, “Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))).” According to 24 CFR 960.257(d) PHA reexamination policies, “The PHA must adopt admission and continued occupancy policies concerning conduct of annual and interim reexaminations in accordance with this section, and shall conduct reexaminations in accordance with such policies.” According to the Authority’s Admissions and Continued Occupancy Policy (ACOP), “The method of calculating income and rent must be documented in the applicant or resident file. All verification attempts, information obtained, and decisions reached during the verification process must be recorded in the family’s file in sufficient detail to demonstrate that all of the verification policies required under the rules and regulations of the Public Housing program, or other housing program as may be relevant, have been followed.” According to the ACOP, “SHA must periodically certify that households are eligible for housing subsidy. To provide this certification, SHA must conduct an annual reexamination (at least once every 12 months) of family composition and income for non-elderly, non-disabled households and a triennial reexamination (at least once every 36 months) of households in which all adult family members are elderly and/or disabled.” Condition: During testing, we noted the Authority lacked adequate internal controls to ensure documentation was maintained in the tenant file and properly supported the Housing Assistance Payment (HAP) in accordance with federal regulation and Authority policy. Questioned costs: None Context: During testing, we identified the following eligibility issues in four separate files: • Three of forty sampled tenant files lacked documentation supporting income eligibility. • Two of forty sampled tenant files did not include evidence of an annual reexamination as of the effective date. • One of forty sampled tenant files did not accurately reflect annual income obtained from the Enterprise Income Verification (EIV) system. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as its administrative policy. Effect: The Authority may be providing housing assistance to families who are either not eligible for the program or receiving assistance in excess of what is allowed. Repeat Finding: No. Recommendation: We recommend the Authority design and implement controls to ensure tenant files include documentation supporting both initial and ongoing income eligibility, in accordance with federal regulation and Authority policy. Views of responsible officials: There is no disagreement with the audit finding.