Finding 376043 (2023-002)

Significant Deficiency Repeat Finding

Requirement

Questioned Costs

Year

2023

Accepted

2024-03-14

Audit: 295068

Organization: Housing Authority of the City of York (SC)

Auditor: Barton Gonzalez & Myers P A

AI Summary

Core Issue: The Authority lacks adequate controls over income targeting, resulting in only 70% of new admissions being extremely low income, below the required 75%.
Impacted Requirements: Compliance with HUD's Section 8 income targeting mandate, which requires at least 75% of new admissions to have incomes not exceeding 30% of the area median income.
Recommended Follow-Up: Implement monitoring to ensure 75% of new admissions are extremely low income, and prioritize applicants from the waiting list who meet this criterion.

Finding Text

2023-002 Special Tests and Provisions – Income Targeting Program: U.S. Department of HUD: Section 8 Housing Choice Vouchers (CFDA 14.871) Type of Finding: Significant Deficiency in Internal Control and Other Matter to be Reported Under the Uniform Guidance This is a repeat finding of 2022-002 from June 30, 2022 (initially reported June 30, 2021) Statement of Condition The Authority did not have adequate controls over income targeting to assure that the Authority is in compliance with this requirement. During our testing, we noted that tenants with incomes that were extremely low accounted for approximately 70% of new admissions during the fiscal year, which is below the minimum required percentage of 75%. Criteria During each fiscal year, at least 75% of the Authority’s new admissions in the Housing Choice Voucher Program must have incomes that do not exceed 30% of the area median income (“extremely low”) as published by HUD. Questioned Costs None. Effect The Authority does not appear to be in compliance with Section 8 income targeting requirements. Cause The Authority did not have sufficient internal controls in place to track income targeting. Recommendation We recommend the Authority assure that at least 75% of new admissions be in the extremely low-income bracket. This should be monitored throughout the year. The Authority can also select applicants on the waiting list who are extremely low income by bypassing others on the list that don’t meet the requirement and documenting that the person was selected ahead of others to be able to meet the requirement. Views of Responsible Officials of the Auditee: We concur with the recommendation. We will closely monitor new admissions and focus on applicants on the waiting list who meet the criteria as extremely low income so that the 75% requirement is met.

Corrective Action Plan

2023-002 Special Tests and Provisions – Income Targeting Program: U.S. Department of HUD: Section 8 Housing Choice Vouchers (CFDA 14.871) Type of Finding: Significant Deficiency in Internal Control and Other Matter to be Reported Under the Uniform Guidance This is a repeat finding of 2022-002 from June 30, 2022 (initially reported June 30, 2021) Statement of Condition The Authority did not have adequate controls over income targeting to assure that the Authority is in compliance with this requirement. During our testing, we noted that tenants with incomes that were extremely low accounted for approximately 70% of new admissions during the fiscal year, which is below the minimum required percentage of 75%. Recommendation We recommend the Authority assure that at least 75% of new admissions be in the extremely low-income bracket. This should be monitored throughout the year. The Authority can also select applicants on the waiting list who are extremely low income by bypassing others on the list that don’t meet the requirement and documenting that the person was selected ahead of others to be able to meet the requirement Action Taken: We concur with this finding. We will closely monitor new admissions and focus on applicants on the waiting list who meet the criteria as extremely low income so that the 75% requirement is met. Our lease rate has been decreasing due to a decrease in availability in our area. We have been issuing vouchers every month and have little to no wait on our waiting list. We are also accepting applications every week. We have been unable to exclude persons due to the extremely low-income bracket requirement because we are trying to increase the overall utilization in our voucher program. We have submitted a request to HUD to allow an exception to the income targeting rule and are currently awaiting a response. Effective Date: February 29, 2024 Contact Information Jenny Hammond, Executive Director Housing Authority of the City of York 221 California Street York, SC 29745 (803) 684-7359

Other Findings in this Audit

376042 2023-001

Significant Deficiency Repeat
952484 2023-001

Significant Deficiency Repeat
952485 2023-002

Significant Deficiency Repeat

Programs in Audit

ALN	Program Name	Expenditures
14.871	Section 8 Housing Choice Vouchers	$1.37M
14.850	Public and Indian Housing	$439,140
14.872	Public Housing Capital Fund	$343,676