Finding Text
Federal Agency: U.S. Department of Housing and Urban Development: Section 8 Housing Choice Vouchers (ALN 14.871) Compliance Requirement: Eligibility (E) Type of finding: Significant Deficiency in Internal Control (SD), Instance of Noncompliance (NC) Statement of Condition: We performed an eligibility test and examined a sample of sixty (60) participant files. The following summarizes the deficiencies found: a) In six (6) cases, we found discrepancies between the income reported by participants in the HUD50058 – Family Report and record documentation. b) In one (1) case, we observed a variance between the standard payment amount that was applied and the amount that should have corresponded according to established guidelines. c) In one (1) case, a misstatement involving the standard payment number led to an alteration in the payment amount. Criteria 24 CFR section 982.516 (a) (2) states that the PHA must obtain and document in the tenant file third-party verification of the following factors, or document in the tenant file why third party verification was not available: (i) Reported family annual income; (ii) the value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. Section 982.503 states that HUD publishes fair market rents for each market area in the U.S., requiring Public Housing Agencies (PHAs) to adopt a payment standard schedule based on these rents for different unit sizes within their jurisdiction. These payment standard amounts are used to calculate the monthly housing assistance payment for families, with a single payment standard amount established for each unit size, which can be uniform across the FMR area or vary by designated parts of the area. Cause of Condition The internal controls and procedures of the Municipality's program did not ensure that the data in HUD50058 - Family Report were correct. There was no internal control verifying income correctly. Effect of Condition The Municipality is not in compliance with 24 CFR Section 982.516 (A), Section 982.503 and with the PHA’s administrative plan. Recommendation We recommend that management improve monitoring procedures in internal controls and be able to accurately calculate the 50058-Family Report. Carefully check the file to verify
what qualifies as income and what is not, as well as issues related to the payment
standard.
Questioned Costs None