Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Award Identification Number and Year: WA001EH014, WA001EH0013, 15-16 - 2025 Award Period: January 1, 2025 through December 31, 2025 Compliance Requirement: Special Tests and Provisions - Housing Assistance Payment 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 pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register (24 CFR section 982.158 and 24 CFR Part 982, Subpart K). Verify a HAP contract and tenancy addendum has been fully executed. A "fully executed HAP" for the HCV Program means that the Housing Assistance Payments contract between the landlord (owner) and the Public Housing Agency (PHA) has been signed by both parties, signifying that the landlord has agreed to lease a unit to a voucher holder and the PHA has approved the unit and will provide housing assistance payments to the landlord on behalf of the tenant, with all necessary documents and conditions met according to HUD regulations. Similarly, a "tenancy addendum" is considered fully executed when both the landlord and tenant have signed the document, signifying their agreement to the additional terms and conditions outlined within it, which are now legally binding and part of the overall lease agreement; essentially, all parties involved have completed their required actions by signing the addendum.” Condition: During testing, we noted the Authority lacked adequate internal controls to ensure that a fully executed HAP contract and tenancy addendum were included in tenant files. Questioned costs: None Context: During testing, we identified the following HAP issues in four separate files: • Three of the forty sampled tenant files did not include a fully executed HAP contract signed by both the landlord (owner) and the PHA. • Four of the forty sampled tenant files did not include a fully executed tenancy addendum signed by both the landlord and the tenant. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations. Effect: The Authority lacks documentation to support the tenancy. Repeat Finding: No. Recommendation: We recommend the Authority design and implement controls to ensure tenant files include a fully executed HAP contract and tenancy addendum, including a review of the tenant file before the family moves in. Views of responsible officials: There is no disagreement with the audit finding.