Finding 2025-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Catalog Numbers: 14.850 Non Compliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency 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 member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). 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 733 units. Of a sample size of twenty-one (21) tenant files, the following was noted: • Citizenship declaration was missing in 1 file • Original application was missing in 1 file • HUD Form 9886 was missing in 1 file • Lead based paint form was missing in 1 file • HUD form 50058 was missing in 1 file • Verification of income was missing in 1 file • Verification of assets was missing in 1 file Our sample size is statistically valid. Known Questioned Costs: $11,005 Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority experienced high turnover and did not properly train employees in the Public and Indian Housing department, which resulted in the Authority having a limited capacity to perform the required maintenance of tenant files, and properly maintain and monitor a system of internal controls that reasonably assures the program is in compliance. Effect: The Authority is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files in the Public and Indian Housing Program. Recommendation: We recommend that the Authority implement a process whereby Authority personnel are hired and trained on tenant file maintenance so that documents are accumulated, stored and safeguarded to ensure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Public and Indian Housing Program and has implemented a quality control program. The Authority will continue to train staff on the proper maintenance of tenant files and implement additional internal control procedures that will ensure compliance with federal regulations. Sean Buchanan, Deputy Operating Officer is responsible for ensuring proper internal controls are in place to prevent significant deficiencies and material weaknesses from occurring and is expected to be completed by December 31, 2026.