Finding 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Catalog Numbers: 14.850 Non Compliance - E. Eligibility - Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority’s files and on discussion with management, a tenant's rent payment was calculated incorrectly. Context: There are approximately 1,804 units. Of a sample size of thirty-one (31) tenant files, tenant rent was calculated incorrectly in one (1) file. Our sample size is statistically valid. Known Questioned Costs: $940* *Represents HAP attributable to one (1) tenant file for which the Authority could not demonstrate compliance with eligibility requirements. The questioned costs do not represent amounts determined to be ineligible but rather costs associated with miscalculation for verification of income. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. Net income was used in error when calculating the tenant's rent instead of gross income. Effect: The Public and Indian Housing Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend that the Authority implement a process whereby Authority personnel properly trained on tenant recertification processes to ensure 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 Public and Indian Housing Program and has implemented a quality control program. The Authority will continue to train staff on proper tenant recertification processes and implement additional internal control procedures, such as utilizing AI, that will ensure compliance with federal regulations. Ms. Chasity Jackson, Director of Asset Management, will be responsible to implement this corrective action by December 31, 2026.