Finding 247638 (2022-001)

Criteria: Organizations operating the Section 8 Housing Assistance Payment Program are required to maintain sufficient internal controls to ensure compliance with eligibility requirement. Condition: 1) 1 of the 40 tenants selected for testing had an incorrect amount reported for social security income on Form HUD-50059. 2) 1 of the 40 tenants selected for testing had an amount reporting for medical expenses on Form HUD-50059 that was not supported by documentation in the tenant?s file. Cause: Procedures to ensure that the required information and documentation were obtained and maintained did not exist. Effect: The housing assistance payments and tenant payments may potentially be incorrect. Auditor's Recommendation: We recommend that an internal control procedure be implemented to ensure that all HUD-50059 forms are completed accurately and all required information is obtained and maintained within the tenant files. Views of Responsible Officials and Planned Corrective Action: 1) Management will meet with the tenant to properly investigate causation for the finding noted above. Pending the outcome of the investigation, Management will correct the July 2022 Annual Certification with the expectation of correcting the income used to tabulate the tenant?s level of rental assistance, the tenant will not be charged for the error, and HUD will be reimbursed for subsidy accordingly. 2) Management removed the active medical expense from the expense tab on the management software. The medical expenses do not impact the level of rental assistance since the amount did not exceed 3 percent of the tenant?s household income. Nevertheless, Management reclassified the medical expense as inactive to ensure the medical expense is not part of the future certifications.