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 (HCV) 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 Housing Voucher Cluster, “The PHA must do the following: (1) 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 sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD.” According to the Authority’s Housing Choice Voucher Program Administrative Plan updated August 25th, 2025, “It is required that all adult applicants and participants sign a Release of Information form. The purpose of this form is to facilitate automated data collection and computer matching from specific sources and provides the family's consent only for the specific purposes listed on the form. HUD.” According to the Authority’s Housing Choice Voucher Program Administrative Plan updated August 25th, 2025, “SHA will obtain income reports for annual reexaminations on a monthly basis. Reports will be generated as part of the regular reexamination process. EIV will also be used to verify that families claiming zero income are not receiving income from any of these sources. Income reports will be retained in participant files with the applicable annual or interim reexamination documents” According to the Authority’s Housing Choice Voucher Program Administrative Plan updated August 25th, 2025, “SHA will check UIV sources and/or request information from third-party sources to verify that certain forms of income such as unemployment benefits, TANF, SS, SSI, and earnings are not being received by families claiming to have zero annual income. Applicants must submit an affidavit attesting to reported income, assets, expenses and other factors which would affect an income eligibility determination.” 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: $72,204 Context: During testing, we identified the following eligibility issues in four separate files: • Income reexamination: Two of forty sampled tenant files did not contain third-party verification (such as EIV) demonstrating reexamination of family income and composition at least once every 12 months. • Zero-income affidavit: One of forty sampled tenant files did not contain an affidavit attesting to zero income. • Release of Information: Three of forty sampled tenant files did not include signed Release of Information consent forms applicable to the eligible time frame. • Internal control checklist: Two of forty sampled tenant files did not show evidence that an internal control checklist was completed for the effective date. • Supporting documentation: One of forty sampled tenant files lacked supporting documentation for the effective date; the reexamination was not completed. 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: Yes. See prior year finding 2024-006. Recommendation: We recommend the Authority design and implement controls to ensure tenant files include documentation supporting both initial and ongoing eligibility, in accordance with federal regulation and Authority policy. Views of responsible officials: There is no disagreement with the audit finding.