Finding 35935 (2022-004)

Significant Deficiency Repeat Finding
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2023-09-28

AI Summary

  • Core Issue: Errors in tenant income calculations and missing quality control worksheets led to incorrect housing assistance determinations.
  • Impacted Requirements: Compliance with HUD Section 8 regulations for accurate tenant eligibility and assistance calculations.
  • Recommended Follow-Up: Implement stronger review processes and ensure adherence to policies for accurate assistance calculations and thorough quality checks.

Finding Text

Significant Deficiency 2022-004 Eligibility Federal Program U.S. Department of Housing and Urban Development AL #14.871 & 14.879 Grant Award No. ND031-Housing Choice Vouchers & ND031-Mainstream Vouchers Grant Award Year 2022 Criteria The Authority must determine HAP assistance based on a calculation from the eligible tenant?s annual income, deductions and third party verification in accordance with HUD Section 8 Housing Voucher Program compliance requirements. Condition During our review of tenant files, one tenant?s verified income and utility allowances were incorrectly entered into the rent determination worksheet, resulting in the tenant?s HAP portion to be miscalculated. Third party verification of income was not conducted for one of the files in the sample. The aforementioned errors remained undetected through a second review, performed by another caseworker, of the tenant file. We also noted four tenant files were missing completed quality control worksheets, which function as the Authority?s primary internal review process to ensure an annual certification, at minimum, was performed and appropriate tenant information is documented. Context We tested a sample of forty files out of 259 active files for eligibility compliance. Effect Tenants may not be provided the proper housing assistance in accordance with their income and eligibility factors. Cause Lack of controls and oversight during the year. Repeat Finding This is a repeat finding of 2021-004. Recommendation We recommend the Authority follow its policy on calculating and applying the proper assistance to tenants receiving vouchers. We also emphasize performing a quality review over its tenant files to ensure all income and eligibility factors are properly determined. Views of Responsible Officials Management recognizes the detection failure and will determine the best steps to implement in order to create a more robust review process.

Corrective Action Plan

2022-001 Contact Person Derek Johnson, Managing Agent Corrective Action Plan The Housing Authority has reorganized roles and responsibilities to ensure that all reporting is accurate and all tenant files are correctly maintained. The Compliance Officer and Director of Finance have received training and certification in Rural Development and Multifamily Compliance and handle all tenant files and uploads. Planned Completion Date for CAP Changes were implemented immediately. 2022-002 Contact Person Derek Johnson, Managing Agent Correction Action Plan No action planned on the finding. The Authority and board feel that the additional costs to the Authority would not be significantly beneficial. The Authority does mitigate this situation through the review of the draft financial statements and accompanying notes to the financial statements. Planned Completion Date for CAP None. See above. 2022-003 Contact Person Derek Johnson, Managing Agent Corrective Action Plan The Authority?s management and Board of Commissioners will review proposed audit entries and approve them. Any common adjustments, such as those identified in the current year, not likely to be recurring, will be reviewed and approved by appropriate Authority personnel. The Director of Finance drafts the journal entries, which are reviewed and approved by the Executive Director. Planned Completion Date for CAP Immediately 2022-004 Contact Person Derek Johnson, Managing Agent Correction Action Plan The Authority has hired a Deputy Director who completes quality control audits on all tenant files periodically. The Deputy Director holds monthly meetings with all eligibility staff workers to ensure compliance with policies and procedures. Planned Completion Date for CAP Immediately

Categories

HUD Housing Programs Eligibility Significant Deficiency

Other Findings in this Audit

  • 35936 2022-004
    Significant Deficiency Repeat
  • 612377 2022-004
    Significant Deficiency Repeat
  • 612378 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $1.58M
14.879 Mainstream Vouchers $146,982
14.182 Section 8 New Construction and Substantial Rehabilitation $45,178
10.415 Rural Rental Housing Loans $17,984