Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Catalog Numbers: 14.871 & 14.879 Noncompliance – N. Special Tests and Provisions - Housing Assistance Payment Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: PHAs must pay monthly HAP in amounts that agree to Line 12u of the HUD-50058 and are accurately reflected in the HAP contract and HAP register (24 CFR § 982.158 and 24 CFR Part 982, Subpart K). PHAs must adopt and maintain a payment standard schedule establishing voucher payment standards by bedroom size within the PHA’s jurisdiction (24 CFR § 982.505). Payment standards must generally be set within 90 percent to 110 percent of HUD-published Fair Market Rents (FMRs) or Small Area FMRs, as applicable, without HUD approval (24 CFR § 982.503(d)). PHAs are required to review payment standards annually and revise the schedule, as necessary, no later than three months following the effective date of new FMRs to remain within the basic range (24 CFR § 982.503(c)(3)). For new HAP contracts, the payment standard in effect at the time of HAP execution must be used. For existing HAP contracts, increases in payment standards must be applied no later than the earliest of a rent increase affecting the family share, the family’s next regular or interim reexamination, or one year after the effective date of the payment standard increase, unless applied earlier in accordance with the PHA’s Administrative Plan (24 CFR § 982.505(c)(4)). Condition: Based upon inspection of the Authority’s files and on discussion with management, it was determined the Authority applied incorrect payment standard amounts in calculating HAP and were unable to provide the HAP contracts. As a result, the HAP reported on Line 12u of the HUD-50058 were calculated using payment standards that were not applicable to the households at the time the HAP amounts were determined. Context: Of a sample size of thirty-four (34) tenants, twenty-five (25) housing assistance payments contracts were unable to be provided. Of a sample size of thirty-four (34) tenants, twenty (20) tenants' HAP reported on Line 12u of the HUD-50058s were calculated using payment standards that were not applicable to the households at the time of recertification. Our sample size is statistically valid. Criteria: PHAs must pay monthly HAP in amounts that agree to Line 12u of the HUD-50058 and are accurately reflected in the HAP contract and HAP register (24 CFR § 982.158 and 24 CFR Part 982, Subpart K). PHAs must adopt and maintain a payment standard schedule establishing voucher payment standards by bedroom size within the PHA’s jurisdiction (24 CFR § 982.505). Payment standards must generally be set within 90 percent to 110 percent of HUD-published Fair Market Rents (FMRs) or Small Area FMRs, as applicable, without HUD approval (24 CFR § 982.503(d)). PHAs are required to review payment standards annually and revise the schedule, as necessary, no later than three months following the effective date of new FMRs to remain within the basic range (24 CFR § 982.503(c)(3)). For new HAP contracts, the payment standard in effect at the time of HAP execution must be used. For existing HAP contracts, increases in payment standards must be applied no later than the earliest of a rent increase affecting the family share, the family’s next regular or interim reexamination, or one year after the effective date of the payment standard increase, unless applied earlier in accordance with the PHA’s Administrative Plan (24 CFR § 982.505(c)(4)). Condition: Based upon inspection of the Authority’s files and on discussion with management, it was determined the Authority applied incorrect payment standard amounts in calculating HAP and were unable to provide the HAP contracts. As a result, the HAP reported on Line 12u of the HUD-50058 were calculated using payment standards that were not applicable to the households at the time the HAP amounts were determined. Context: Of a sample size of thirty-four (34) tenants, twenty-five (25) housing assistance payments contracts were unable to be provided. Of a sample size of thirty-four (34) tenants, twenty (20) tenants' HAP reported on Line 12u of the HUD-50058s were calculated using payment standards that were not applicable to the households at the time of recertification. Our sample size is statistically valid. Known Questioned Costs: Unknown Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to housing assistance payments. The Authority has not maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster program is in material non-compliance with the special tests and provisions compliance requirement related to the payment standards of housing assistance payments. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to housing assistance payments. The Authority has not maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster program is in material non-compliance with the special tests and provisions compliance requirement related to the payment standards of housing assistance payments. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.