Finding Text
Finding 2025-001 – Housing Choice Voucher Tenant Files – Eligibility – Internal Control over Tenant Files - Noncompliance & Significant Deficiency – Housing Choice Voucher Program – ALN 14.871 Condition & Cause: We reviewed 215 Housing Choice Voucher tenant-based and project-based assistance tenant files and noted 62 files (28.8% of the sample) with one or more of the following noncompliance exceptions: • Unsupported Actions – 3 files: Files lacked adequate supporting documentation for the applicable action taken. • Adjusted Annual Income Errors – 32 files (14.9%): 19 files contained missing or outdated income or deduction verifications; 15 files contained miscalculations of adjusted annual income. This rate increased from 11% in the prior year. • Late Annual Reexaminations – 20 files (9.3%): Annual reexaminations were completed more than three months past the due date. This rate increased from 4.8% in the prior year. • Missing EIV Documentation – 11 files (5.1%): Required Enterprise Income Verification (EIV) reports were not obtained at reexamination. This rate increased from 2.0% in the prior year. • Outdated or Unsupported Utility Allowance – 2 files: Actions were based on an outdated or unsupported Utility Allowance schedule. • HQS Inspection Overdue – 2 files: Units had not received a Housing Quality Standards (HQS) inspection within the prior 24 months as of fiscal year-end 2025. • Missing or Untimely Signatures – 2 files: Actions were either unsigned by an adult household member at the time of completion or contained signatures dated materially after the action date. Based on extrapolation, the potential misstatement of HAP expense due to the identified noncompliance is both immaterial to the audited financial statements and below the disclosure threshold. The noncompliance identified above is attributable primarily to leadership transitions within the HCV program. Both the Tenant-Based Voucher (TBV) and Project-Based Voucher (PBV) leadership positions experienced extended vacancies and multiple personnel changes over the past three years, a pattern not isolated to the current audit period. Criteria: Housing Choice Voucher program participants are subject to eligibility and file documentation requirements established by 24 CFR Part 982, 24 CFR § 5.609, HUD Handbook 4350.3, applicable HUD notices, and the Agency's HCV Administrative Plan. Effect: Failure to accurately document and calculate annual income and conduct timely reexaminations can result in improper HAP payments, jeopardizing the integrity of HCV program funding. Noncompliance with program requirements may also impose an undue financial burden on participants, contrary to the Agency's mission. During deposit testing, we identified two instances in which tenants were overcharged rent as a direct result of late reexaminations, with rental charges not adjusted to reflect the effective date of the rent decrease. Continued noncompliance risks HUD sanctions, including a reduction in vouchers or loss of program funding. Recommendation: The Agency should increase monitoring and continue to leverage its internal compliance team, established in Q1 2025, to implement standardized file review procedures, monitor reexamination due dates, and ensure EIV documentation and income verification requirements are met consistently across both TBV and PBV programs. Ongoing staff training efforts should be maintained to reinforce regulatory requirements as leadership stabilizes. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations