Finding Text
Finding 2025-006 – Tenant Files – Eligibility – ALN 14.850 Low Rent Public Housing Program – Noncompliance and Material Weakness Condition & Cause: The Housing Authority's tenant files did not consistently contain the documentation necessary to demonstrate compliance with federal requirements for the Public Housing program. The exceptions identified indicate deficiencies in the Housing Authority's file review, documentation, and quality control processes. We reviewed 10 Public Housing participant files and identified noncompliance in nine files. Some files contained more than one exception. The following conditions were identified: • Six participants did not receive an annual unit inspection during the fiscal year; • One file lacked adequate income verification; • Two files lacked a declaration of citizenship for at least one household member; • Two files lacked a Social Security card; • One file lacked a lead-based paint disclosure for a household with a member under age six; • One file lacked the annual application for continued occupancy; and • One file did not contain the required EIV report at annual reexamination. Criteria: For the Public Housing program, 24 CFR §960.257(a) requires annual reexamination of family income and composition for families paying income-based rent and requires appropriate rent adjustments upon verification of the information. The PHA must adopt written policies governing annual and interim reexaminations and conduct reexaminations in accordance with those policies. The Housing Authority is also required to comply with applicable HUD requirements concerning inspections, lead-based paint disclosures, Social Security documentation, citizenship documentation, HAP contracts, utility allowances, EIV, and other required participant documentation. 2 CFR §200.303(a) additionally requires the Housing Authority to establish and maintain effective internal controls over Federal awards, while 2 CFR §200.303(c) requires management to evaluate and monitor compliance with applicable Federal requirements. Effect: The deficiencies increase the risk that participants may receive assistance for which they are not eligible or may receive assistance in amounts that are not properly calculated. Inadequate documentation also prevents the Housing Authority from demonstrating compliance with federal program requirements. In addition, the absence of timely inspections and required tenant documentation increases the risk that housing units may not meet program requirements and that participant eligibility and continued assistance may not be properly supported. Recommendation: We recommend that the Housing Authority complete and implement comprehensive SOPs and QC procedures for both the Housing Choice Voucher and Public Housing programs. At a minimum, the procedures should establish: 1. Required documentation for initial eligibility and annual reexaminations; 2. Required income and deduction verification procedures; 3. Procedures for reviewing EIV information; 4. Required citizenship and identity documentation; 5. Required HAP contracts and other program documents; 6. Procedures for maintaining current utility allowances; 7. Annual inspection procedures and supervisory monitoring; 8. Lead-based paint documentation requirements; 9. Required annual applications for continued occupancy; 10. Supervisory review of tenant files before completion of annual reexaminations; and 11. Periodic independent QC reviews with documented corrective action. Management should also review the files identified during the audit and correct any eligibility, rent, assistance, inspection, or documentation deficiencies. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.