Finding 32252 (2022-002)

Material Weakness
Requirement
Eligibility
Questioned Costs
-
Year
2022
Accepted
2023-01-04

AI Summary

  • Core Issue: Timely recertifications for the MTW and HCV programs were not completed, leading to unsupported tenant subsidies.
  • Impacted Requirements: Bi-annual and annual recertification processes were not followed, affecting eligibility and subsidy calculations.
  • Recommended Follow-Up: Enhance monitoring of quality control procedures and implement stronger internal controls to ensure compliance with recertification timelines.

Finding Text

2022-002 Recertification?s Federal Agency: U.S. Department of Housing and Urban Development (Passed through MA DHCD) Federal Programs: 14.881 Moving to Work Demonstration Program 14.871 Housing Choice Voucher Program (Housing Voucher Cluster) Condition: Five recertification?s for MTW were not completed in a timely manner. Two recertification?s for HCV were not completed in a timely manner. Four recertification?s included unsupported or incorrect income amounts in the calculation of tenant rent for MTW. Criteria: The MTW and HCV programs require tenants to be recertified bi-annually for MTW and annually for HCV, in order to determine eligibility and calculate the amount of subsidy the tenant will receive on a monthly basis. This includes but is not limited to, verification of tenant income, the value of assets, deductions from annual income, and determining family composition. Cause: The Organization?s normal internal control policies and procedures were modified as a result of the ongoing global pandemic, however, the Organization was unable to complete the recertification?s in accordance with program requirements. Effect: Non-compliance with program requirements resulting in payment of unsupported or incorrect tenant subsidies. Context: A sample of 25 recertifications were selected for each program for the month of December 2021 with subsidy payments totaling $40,408 and $37,678 for MTW and HCV, respectively. The total population consisted of approximately 6,700 and 250 tenants for MTW and HCVP with subsidy payments totaling $10,996,581 and $331,179, respectively. Our tests found four tenant files that did not use the correct income verification documentation with questioned costs totaling $6,204 and seven recertifications were not completed in a timely manner. Our sample was not a statistically valid sample. Questioned Costs: $6,204 Recommendation: We recommend that monitoring of established quality control procedures be enhanced and additional internal control procedures be implemented to ensure recertification?s are completed in accordance with program requirements. Management Response: Management agrees with the finding. See management?s attached corrective action plan.

Corrective Action Plan

2022-002 Recertifications 14.881 Moving to Work Demonstration Program ? Award No. OCD26401344019MTW 14.871 Housing Choice Voucher Program (Housing Voucher Cluster) ? Award No. OCD26401344019HCV Responsible Official John Hillis Director of Inspections & Property Owner Services, Systems, and Compliance Plan Detail After a detailed RFP process, Metro Housing has selected an outside vendor (Nan McKay) to assist with completing a backlog of regular reexaminations amassed during calendar years 2020 and 2021. The contract was signed on September 27, 2022. By clearing up this backlog of work, Metro Housing staff working on the completion of regular re-exams for the Section 8 HCVP and MTW programs will be able to renew their focus on completing current work timely and accurately. Metro Housing is also making changes to decrease caseload sizes for Program Specialists while also streamlining workflows to better internal and external communication needed to complete our tasks. The roll-out of this new setup should be complete before the end of the current calendar year. Anticipated Completion Date June 30, 2023 ? All reexaminations will be current, and past due percentages will be lowered to acceptable levels.

Categories

Subrecipient Monitoring Eligibility HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 32251 2022-001
    Material Weakness
  • 32253 2022-001
    Material Weakness
  • 32254 2022-002
    Material Weakness
  • 32255 2022-001
    Material Weakness
  • 32256 2022-002
    Material Weakness
  • 608693 2022-001
    Material Weakness
  • 608694 2022-002
    Material Weakness
  • 608695 2022-001
    Material Weakness
  • 608696 2022-002
    Material Weakness
  • 608697 2022-001
    Material Weakness
  • 608698 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.023 Covid-19 Emergency Rental Assistance Program $219.29M
14.881 Moving to Work Demonstration Program $135.44M
14.871 Section 8 Housing Choice Vouchers $4.20M
21.019 Covid-19 Coronavirus Relief Fund $2.14M
14.241 Housing Opportunities for Persons with Aids $1.81M
14.228 Covid-19 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $595,788
14.181 Supportive Housing for Persons with Disabilities $563,073
14.267 Continuum of Care Program $167,245
14.881 Covid-19 Moving to Work Demonstration Program $14,913