Finding Text
2025-003 Eligibility Public Housing Operating Fund, AL No. 14.850 Significant Deficiency in Internal Control Other Matter to be Reported Under the Uniform Guidance Condition: Out of an approximate population of 980 tenants, a total of 40 tenant files were selected for testing and the following deficiencies were noted: • Two files contained an incorrect utility allowance • Two files did not have inspections performed during the required time period • One file contained income calculation errors • One file was missing a 214 form for a member of the household • One file was recertified late (one month overdue) Criteria: The Authority’s ACOP and 24 CFR 960.259 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding complete and accurate tenant files. Context: The auditor haphazardly selected 40 tenant files out of the population, which is considered to be a statistically valid sample. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Authority is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The deficiencies are a result of employee errors, failure to properly review work for accuracy, and lack of site management review and oversight. Effect: The Authority is not in full compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: None, operating subsidy amounts were not impacted by these noted items. Auditor Recommendations: The Authority should continue to train staff on the established procedures and controls in place to ensure full compliance in regard to eligibility. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample.