Finding Text
Finding 2025-005 N. Special Tests and Provisions: N4. Vacant Units Identification of the Federal Program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Assistance Listing Number: 14.856 Federal Program Name: Section 8 Project-Based Cluster Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation Program Year: January 1, 2025 through December 31, 2025 Program No.: Multiple Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, “The recipient and subrecipient must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” “The PHA or owner must reduce claims for assistance on vacant units under certain circumstances. However, there are instances where special claims are allowed for vacancy losses, unpaid rent, and tenant damages on eligible units (24 CFR sections 880.611, 881.601, 882.411, 882.808(f), 883.701, 884.106, 886.109, and 886.309).” Condition: For 1 of 10 (10%) tenants with an end of participation action code sampled to test the Authority’s internal controls over and compliance with the vacant units compliance requirement, we noted that the claim (housing assistance payment) was not reduced in a timely manner. Cause: The Authority’s internal control over vacant units was not operating effectively during the fiscal year. Effect or Potential Effect: Claims for vacant units may not be reduced or may not be reduced in a timely manner. Questioned Costs: A total of $1,383 related to Assistance Listing No. 14.856, representing the two months of housing assistance payments that should have been reduced during fiscal year 2025. Context: There were 60 vacant units for the program during the fiscal year ended December 31, 2025. Identification as a Repeat Finding, if Applicable: This finding is not a repeat finding from the prior year. Recommendation: The Authority should reassess its internal control over vacant units to ensure claims are reduced or reduced in a timely manner. Views of Responsible Officials: CHA Management agrees and will strengthen oversight of vacancy payment processing by updating PBV quality-control procedures, training staff, and increasing compliance monitoring to prevent untimely or inaccurate claims.