FAC Explorer

Finding 31233 (2022-001)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2023-03-09
Audit: 36537
Organization: Valley Crossroads, Inc. (UT)
Auditor: Smith Marion & CO

AI Summary

  • Core Issue: Annual income reexaminations for assisted housing units are not being completed, leading to non-compliance with federal requirements.
  • Impacted Requirements: Failure to meet eligibility criteria for housing assistance can result in termination of aid, overpayments, inaccurate records, and increased fraud risk.
  • Recommended Follow-Up: Address staffing challenges by improving retention strategies and prioritize timely completion of recertifications, potentially using additional resources.

Finding Text

Finding 2022-001 Information on Federal Program. ALN 14.181 ? Section 811 Supportive Housing Type of Finding. Non-compliance and significant deficiency in internal controls over compliance. Compliance Requirement. Eligibility Criteria. Pursuant to the 2022 OMB Compliance Supplements 4-14.181-4 ?The owner is responsible for annually reexamining incomes of households occupying assisted units and make appropriate adjustments to the tenant payment and the project rental assistance payment (24 CFR section 891.410). Assistance applicants shall submit signed consent forms upon initial application and at reexamination (24 CFR section 5.230).? Condition. The auditor noted that annual reexaminations were not being completed. Cause. Recertifications were not completed on time due to low staffing and turnover. Effect. Potential effects of failing to complete annual recertifications are as follows: (1) Termination of Housing Assistance: If the Corporation continues to fail to complete their annual recertification, their housing assistance may be terminated, which could result in unexpected revenue deficits; (2) Overpayment of Housing Assistance: If a tenant's income or family size changes and they do not complete their recertification, they may continue to receive housing assistance that they are no longer eligible for, which can result in an overpayment. This can create financial difficulties for both the tenant and the Corporation, which may need to recoup the overpaid funds; (3) Inaccurate Record-Keeping: Failure to complete annual recertifications can also result in inaccurate record-keeping, which can make it difficult for the Corporation to track and manage their programs effectively. This can lead to delays in processing applications, misallocation of resources, and other administrative issues; (4) Potential Fraud: Failure to complete annual recertifications can also increase the risk of fraud, as tenants may continue to receive housing assistance even if they are no longer eligible. This can lead to financial losses for the housing authority and can undermine public confidence in the program. Questioned Costs. Not determinable. Context. The auditor selected a sample of 2 files for examination of the 20 total assisted units. Both files selected for examination were missing documentation that the annual recertification was completed. This represents 100% of the sample not in compliance with the above requirements. Recommendation. To address this issue, the auditor recommends they take steps to address their staffing and turnover issues. This may include implementing strategies to improve retention, such as offering competitive salaries and benefits, providing opportunities for professional development and growth, and creating a positive work environment. Additionally, the organization may need to prioritize the completion of recertifications, even if it means allocating additional resources or bringing in outside help.

Corrective Action Plan

1. Finding 2022-001 a. Comments on the Finding and Each Recommendation: Management agrees with the finding. b. Action(s) Taken or Planned on the Finding The Corporation will take the following steps: (1) Develop a plan to address staffing and turnover issues: we will work with the HR department to develop a plan to address staffing and turnover issues. This may include conducting a salary and benefits review to ensure that we are competitive in the market, providing opportunities for professional development and growth, and creating a positive work environment; (2) Prioritize the completion of annual recertifications: we will work with the team to prioritize the completion of annual recertifications. This will involve allocating additional resources, if necessary, and bringing in outside help to complete the recertifications on time; (3) Develop a monitoring plan: we will develop a monitoring plan to ensure that annual reexaminations are completed on time. This will include regular checks of tenant files and random sampling to ensure compliance with the regulations; (4) Train staff: we will ensure that all staff involved in the annual reexamination process are trained on the importance of completing them on time, the potential consequences of failing to do so, and the regulations and policies related to annual reexaminations; and (5) Implement a tracking system: we will implement a tracking system to ensure that annual reexaminations are completed on time. The system will include reminders for staff and tenants and a process for tracking the progress of each recertification.

Categories

HUD Housing Programs Procurement, Suspension & Debarment Allowable Costs / Cost Principles Eligibility Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 607675 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.29M