Finding 1239421 (2025-003)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2025
Accepted
2026-09-30
Audit: 414222
Organization: Houston Housing Authority (TX)

AI Summary

  • Core Issue: The Authority failed to perform annual recertifications for 18 out of 1,500 Housing Voucher tenants, indicating a significant internal control weakness.
  • Impacted Requirements: This noncompliance with HUD regulations could lead to incorrect rental assistance amounts, violating both the Authority’s Administrative Plan and federal guidelines.
  • Recommended Follow-Up: The Authority should review and improve its procedures for recertifications and address the identified deficiencies to ensure compliance across all tenant files.

Finding Text

Eligibility Housing Voucher Cluster Material Weakness in Internal Control over Compliance Material Noncompliance (Repeated from prior year, Finding No. 2024-003) Condition: Out of an approximate population of 1,500 of Housing Voucher Cluster tenants we tested 18 tenants and the following deficiencies were noted: • Eighteen files did not have annual recertification performed during the year. Criteria: The Authority’s Administrative Plan and 24 CFR 982.516 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Context: The auditor randomly selected tenant files out of the population from each program as outlined, which we consider to be a statistically valid sample size. 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 Authority experienced staffing and operational challenges which included a large backlog of past due recertifications and did not have the available staff to follow the established internal controls to ensure proper compliance with regards to timely recertifications and collection of required HUD documentation to verify eligibility and calculate accurate housing assistance payments. Effect: The Authority is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: Unknown. Auditor Recommendations: The Authority should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications. 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.

Corrective Action Plan

2025-003 Eligibility Housing Voucher Cluster Material Weakness in Internal Control over Compliance Material Noncompliance Condition: Out of an approximate population of 1,500 Housing Voucher Cluster tenants we tested 18 tenants and the following deficiencies were noted: Eighteen files did not have annual recertifications or a required annual certification performed during the year. Auditor’s Recommendations: The Authority should reevaluate their established procedures and controls in place to ensure full compliance in regard to eligibility and the timeliness of recertifications. 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. Action Taken: Management Response / Action Taken The Authority agrees with the finding and acknowledges that timely annual recertifications and certifications are critical to maintaining compliance with program eligibility requirements. During 2026, the Authority implemented enhanced tracking and monitoring procedures for annual recertifications, including management review of outstanding certifications and recertifications, additional staff training regarding compliance requirements, and increased oversight of file processing activities. The Authority will continue to strengthen internal controls and monitoring procedures to ensure annual recertifications and certifications are completed timely and appropriately documented. The Authority is actively working to bring all required recertifications and certifications current and expects to be fully current by December 31, 2026. Management believes the corrective actions implemented during 2026 will be more fully reflected in the results of the 2026 and 2027 compliance audits. Responsible Party: Senior Vice President of Voucher Processing Time Frame: Corrective actions were initiated during 2026 and are ongoing. The Authority expects all required recertifications and certifications to be current by December 31, 2026, with continued monitoring and oversight through 2027. Management expects the full impact of these corrective actions to be reflected in the 2026 and 2027 compliance audits.

Categories

HUD Housing Programs Eligibility Material Weakness

Other Findings in this Audit

  • 1239419 2025-002
    Material Weakness Repeat
  • 1239420 2025-003
    Material Weakness Repeat
  • 1239422 2025-004
    Material Weakness Repeat
  • 1239423 2025-004
    Material Weakness Repeat
  • 1239424 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.881 MOVING TO WORK DEMONSTRATION PROGRAM $288.39M
14.879 MAINSTREAM VOUCHERS $8.74M
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $7.91M
14.182 Section 8 New Construction and Substantial Rehabilitation $1.33M
14.856 LOWER INCOME HOUSING ASSISTANCE PROGRAM SECTION 8 MODERATE REHABILITATION $777,015
14.895 JOBS-PLUS PILOT INITIATIVE $687,445
14.870 RESIDENT OPPORTUNITY AND SUPPORTIVE SERVICES - SERVICE COORDINATORS $588,452
14.249 SECTION 8 MODERATE REHABILITATION SINGLE ROOM OCCUPANCY $220,762
14.267 CONTINUUM OF CARE PROGRAM $191,709
14.191 MULTIFAMILY HOUSING SERVICE COORDINATORS $152,788
14.892 CHOICE NEIGHBORHOODS PLANNING GRANTS $134,896