Finding Text
Criteria: Continuum of Care Program, Assistance Listing 14.267, requires participant income to be determined and documented in accordance with applicable program requirements. Under 24 CFR 578.77(c)(1)–(3), each program participant on whose behalf rental assistance payments are made must contribute toward rent as required by the regulation. Participant income must be calculated in accordance with 24 CFR 5.609 and 24 CFR 5.611(a), reviewed initially and at least annually thereafter, and supported by information or documentation sufficient to verify income. Applicable pass-through and organizational policies also require participant files to contain required reassessment and income-support documentation and for prescribed certification and reassessment procedures to be completed in the required order. Condition: Our testing of income verification, reassessment, and participant rent-calculation documentation identified instances in which required support was incomplete or procedures were not performed in the prescribed order. Specifically, in a nonstatistical sample of 6 participants, 2 participant files lacked sufficient pay documentation to verify the income used in the related rent calculation. One participant file also lacked required reassessment documentation, and in another instance required documentation was not completed in the prescribed order. These exceptions indicate that required documentation supporting participant reassessments, income determinations, and rent calculations was not consistently completed and maintained. Cause and Effect: The Organization’s participant reassessment and income-verification procedures were not consistently applied or documented, and controls did not consistently ensure that all required documentation was completed, retained, and performed in the prescribed order. Incomplete reassessment and income-support documentation, or completing required procedures outside the prescribed order, increases the risk that participant eligibility, income changes, or rent contributions will not be identified and addressed timely. This may result in incorrect tenant contributions or unsupported rental-assistance payments and limits management’s and auditors’ ability to verify compliance with program requirements. No known questioned costs were identified. Because documentation was insufficient to fully verify the affected income determination, reassessment, and related rent calculation, likely questioned costs, if any, could not be quantified based on the audit procedures performed. Repeat Finding: This is a repeat finding related to prior-year finding 2024-002. Recommendation: We recommend that the Organization implement a standardized participant-file checklist that identifies each required income-verification and reassessment document and the prescribed order of completion. Staff should complete and date each required step, and an independent supervisory reviewer should confirm that all documentation is present and procedures were completed in the required sequence before the reassessment and related rent calculation are finalized. Management should also review affected files and correct any identified documentation or calculation issues prospectively.