Finding 32254 (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.

Categories

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

Other Findings in this Audit

  • 32251 2022-001
    Material Weakness
  • 32252 2022-002
    Material Weakness
  • 32253 2022-001
    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