Finding Text
2021-006
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Public and Indian Housing
Assistance Listing Number: 14.850
Award Period: January 1, 2021 – December 31, 2021
Type of Finding:
Noncompliance and Material Weakness in Internal Control over Compliance
Criteria or specific requirement: Eligibility
Most PHAs devise their own application forms that are filled out by the PHA staff during an interview
with the tenant. The head of household signs (a) a certification that the information provided to the PHA
is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a
federally prescribed general release form for employment information; and (d) a privacy notice. Under
some circumstances, other members of the family may be required to sign these forms (24 CFR
sections 5.212, 5.230, and 5.601 through 5.615).
b.
The PHA must do the following:
(1) As a condition of admission or continued occupancy, require the tenant and other family members
to provide necessary information, documentation, and releases for the PHA to verify income eligibility
(24 CFR sections 5.230, 5.609, and 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file
third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related
to deductions from annual income, and (d) other factors that affect the determination of adjusted
income or income-based rent (24 CFR section 960.259).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from
third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq.,
and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions –
Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent
and housing assistance payment as necessary using the documentation from third party verification (24
CFR sections 960.253, 960.257, and 960.259).
(a)The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant
recertification due solely to a RAD conversion. However, this requirement does not eliminate the
normally scheduled recertification (normally annually). Recertifications required to be performed as part
of the normal tenant recertification process that occur after the RAD conversion, but before the end of
the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not
Public Housing. These recertifications are to be conducted to ensure that tenant payments are
appropriate under the new program. Any testing that results in an audit finding should be a finding of
the PBV or PBRA program and not of the public housing program.
(b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants.
“Families” include, but are not limited to, (1) a family with or without children;
(2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head,
spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, nearelderly,
displaced, or a person with disabilities.
Condition: During the testing of the Public and Indian Housing tenant files for the City and the County
certain special provision compliance deficiencies were noted.
City:
-33 instances where the income, assets, and/or expenses calculated on the 50058 was not
supported with verifications.
-2 instances where the tenant file was missing the HUD9886.
-1 instance where the tenant file was missing the housing authority general release of
information form.
-33 instances where the tenant file was missing the lease/rent adjustment letter.
-33 instances where the tenant file was missing the recertification package/application.
-8 instances where the rent posted per register did not agree with the rent per 50058.
County:
-8 instances where the income, assets, and/or expenses calculated on the 50058 was not
supported with verifications.
-1 instance where the tenant file was missing the HUD9886.
-1 instance where the tenant file was missing the housing authority general release of
information form.
-5 instances where the tenant file was missing the lease/rent adjustment letter.
-5 instances where the tenant file was missing the recertification package/application.
-3 instances where the rent posted per register did not agree with the rent per 50058.
Questioned costs: None
Context: Out of the 40 files tested for the City, 33 contained errors and out of the 40 files tested for the
County, 11 contained errors, as noted above.
Cause: The Authority failed to provide required documentation to be in compliance with program
requirements.
Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the
Public and Indian Housing waiting lists.
Recommendation: We recommend management to assign a person that verifies all the documents
are in place before processing new move ins.
Views of responsible officials: There is no disagreement with the audit finding.