FAC Explorer

Finding 2166 (2022-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
$1
Year
2022
Accepted
2023-11-20
Audit: 3737
Organization: Housing Authority of the City of Omaha (NJ)
Auditor: Novogradac & Company LLP

AI Summary

  • Core Issue: The U.S. Department of Housing and Urban Development found material noncompliance in the Section 8 Housing Choice Vouchers Program due to missing tenant file documents.
  • Impacted Requirements: The Public Housing Authority (PHA) failed to collect necessary documentation for income eligibility verification as required by federal regulations.
  • Recommended Follow-Up: The Authority should implement stronger internal control procedures to ensure compliance with eligibility requirements and improve oversight of tenant file management.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program, Federal Catalog Numbers: 14.871 Material Noncompliance Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance 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). Condition: Based upon inspection of the Authority’s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: Of a sample size of forty-five (45) tenant files, the following information was unavailable for examination at the time of audit: (2) Lead Based Paint forms (1) Original Application (2) Verification of Income (1) Verification of Assets (1) Annual HQS Inspection form (1) HUD Form 9887 Consent to Release Information (1) HUD Form 50058. Our sample size is statistically valid. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Section 8 Housing Choice Voucher Program is in material non-compliance with the eligibility type of compliance requirements of the program. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. View of Responsible Officials and Corrective Actions: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.

Corrective Action Plan

Finding Reference Number: 2022-001 Recommendation The Authority should ensure proper internal controls, which include timely monthly reconciliations of account balances, are in place to prevent material weaknesses from occurring. Reporting views of responsible officials Auditee agrees with the auditor and management will be responsible for implementing the corrective action plan. Completion date or proposed completion date: December 31, 2023 Action(s) taken or planned on the finding Gary Hatfield is responsible for ensuring proper internal controls are in place to prevent significant deficiencies and material weaknesses from occurring. Finding Reference Number: 2022-002 Recommendation We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Reporting views of responsible officials The Authority experienced significant turnover in employees during the year and as a result certain source documents were misplaced or destroyed. Management agrees with the Auditors' finding and has hired a new Chief Financial Officer who will implement the required safeguards and ensure that the Authority follows its Section 8 Administrative Plan and the HUD compliance requirements to remedy the aforementioned deficiencies. Completion date or proposed completion date: December 31, 2023 Action(s) taken or planned on the finding Gary Hatfield is responsible for ensuring proper internal controls are in place to prevent significant deficiencies and material weaknesses from occurring.

Categories

Questioned Costs HUD Housing Programs Eligibility Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 578608 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $39.67M
14.850 Public and Indian Housing $9.67M
14.872 Public Housing Capital Fund $6.95M
14.879 Mainstream Vouchers $809,568
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $731,956
14.896 Family Self-Sufficiency Program $421,190
14.870 Resident Opportunity and Supportive Services - Service Coordinators $260,475
14.239 Home Investment Partnerships Program $254,806
14.889 Choice Neighborhoods Implementation Grants $70,150
14.892 Choice Neighborhoods Planning Grants $12,474