Finding 2025-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster Federal Assistance Listing Numbers: 14.871 and 14.879 Noncompliance - N. Special Tests and Provisions - Selection from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Section 8 Administrative Plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203 (Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that certain new move-ins to the Housing Voucher Cluster Programs were selected from the wait list in an order that is in accordance with the Authority’s Section 8 Administrative Plan. Context: Of a sample size of twenty (20) new move-ins, seven (7) could not be determined to be housed in proper order from the Authority's waiting list. Our sample size is statistically valid. Known Questioned Costs: $169,991* *Represents HAP attributable to seven (7) new move-ins for which the Authority could not demonstrate compliance with the selection from the waiting list requirements. The questioned costs do not represent amounts determined to be ineligible but rather costs associated with the new move-ins that may not have been housed in compliance with the selection from the waiting list requirements. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selection from the waiting list. The Authority has not retained records to support proper selection from the waiting list. Effect: The Housing Voucher Program is in material non-compliance with the special tests and provisions type of compliance related to selection from the waiting list. Recommendation: We recommend that the Authority implement a process whereby Authority personnel are hired and trained on properly housing applicants from the Authority's waiting list that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Housing Voucher Cluster Programs and will train staff to properly house applicants and implement internal control procedures that will ensure compliance with federal regulations. Melena Nelson, Director of Finance, will be responsible to implement this corrective action by December 31, 2026.