Finding Text
Finding 2025-004 Significant Deficiency: Eligibility – Compliance and Control Finding ALN 14.871 and 14.879 - Housing Voucher Cluster: Section 8 Housing Choice Vouchers Federal Agency: U.S. Department of Housing and Urban Development (HUD) Pass-Through Entity: N/A - Direct Award Criteria Or Specific Requirement: HUD allows PHAs to reduce voucher payment standards; however, the reduced standard generally may be applied immediately only to new admissions, families that move, and families with qualifying changes in family size or composition. Existing participants are generally not subject to the reduced standard until their second regular reexamination following the decrease. Condition: The Authority applied the reduced (100 percent FMR-based) payment standard to existing participant households based on interim reexaminations resulting from rent increases and/or changes in income, rather than waiting until the appropriate reexamination date. Cause: The existing controls were not sufficient to identify instances in which the reduced payment standard was improperly applied to existing participant households during interim reexaminations. Effect: The possibility exists that noncompliance with federal requirements could go undetected regarding compliance relating to direct and material compliance requirements. Questioned Costs: Known questioned costs of $153,078 were identified. Context: The Authority was notified by HUD of the condition and performed an internal inspection of 342 files. Of the tested files, 338 files required recalculations of HAP rent assistance. The issue was not detected by existing controls designed to ensure compliance with HUD requirements. Identification As A Repeat Finding: Not applicable. Recommendation: Management should continue providing training and guidance to staff on HUD regulations and Administrative Plan requirements, while reinforcing the circumstances under which reduced payment standards may be applied to participant households and ensuring appropriate supervisory review. Staff should consistently follow applicable HUD requirements, documented guidance, and the Administrative Plan when determining and applying payment standards. Views Of Responsible Officials: Management will continue to provide and support ongoing training and guidance to HCV staff on HUD regulations and Administrative Plan requirements governing payment standards. As part of these corrective actions, HCV leadership has completed additional executive-level management training. Any future change in payment standards will be reviewed with staff before implementation, and its application to existing participant households will be subject to documented supervisory review to ensure the change is applied in accordance with HUD requirements, written guidance, and the Administrative Plan.