Finding 382881 (2023-001)

Material Weakness Repeat Finding
Requirement
LN
Questioned Costs
-
Year
2023
Accepted
2024-03-21

AI Summary

  • Core Issue: The Public Housing Authority failed to properly verify and document tenant income and expenses, leading to incorrect housing assistance payments.
  • Impacted Requirements: Noncompliance with 24 CFR sections 982.516(a), 908, and 982.505(b) regarding annual reexaminations and accurate reporting to HUD.
  • Recommended Follow-Up: The Executive Director and staff must ensure all tenant files have complete documentation to comply with housing assistance payment requirements.

Finding Text

1. Housing Assistance payments Finding Number: 2023-001 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/COVID-19: Section 8 Housing Choice Vouchers and AL #14.879 Mainstream Voucher Program Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Section L -Reporting, and Section N – Housing Assistance Payments Pass-Through Entity: No Repeat Finding from Prior Audit? Yes Prior Audit Finding Number: 2022-001 Noncompliance and Material Weakness 24 CFR section 982.516(a) states the Public Housing Authority (PHA) must conduct a re-examaination of family income and composition at least annually. Section 2 states the PHA must obtain and document in the tenant file third-party verification of the following factors or must document why third-party verification was not available: (i) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent. 24 CFR section 908 states the Public Housing Authority (PHA) is required to submit HUD-50058 form electronically to HUD each time the Public Housing Authority (PHA) completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR section 982.505(b) states the Public Housing Authority (PHA) shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The Authority incorrectly calculated the amount on the HUD-50058 for 5.3% of the tenant files tested for the Housing Choice Voucher program. This resulted in an incorrect amount paid from the Section 8 funding. The Executive Director and Housing Choice Voucher employees should ensure all tenant files maintain the appropriate documentation to meet the requirements of housing assistance payments reporting.

Corrective Action Plan

Finding Number: 2023-001 Planned Corrective Action: Being a small PHA, only 19 of our files were tested. One of those files had an error in it making the error rate 5.263%. In that file, when the tenant’s utility allowance was figured, the system default of the McConnelsville water/sewer rate ($167) was not overridden to the Malta water/sewer rate ($160). This created an error of $7 per month that the tenant was underpaid for his utility allowance, which resulted in the HAP payment to the homeowner being overpaid by $7 per month ($362 instead of $355). Because of this, the tenant’s rental amount due reflected $7 less than it should have been ($238 instead of $245). When the Auditor of State’s representative was on site at MMHA for testing on February 7, 2024, he brought this to our attention. The correction was made in our software system and a notice was sent to the tenant that same day. A copy of the amended HAP contract and a copy of the notice that was sent to the tenant was provided to the Auditor of State’s audit team. Both show a computer-generated date stamp of February 7, 2024. The tenant’s annual re-examination took place on June 1, 2023 and the corrected HAP amount was effective April 1, 2024. For the current year (7/1/22-6/30/23), there was a total payment of $7 from Section 8 funding which was for the month of June 2023. Anticipated Completion Date: February 7, 2024 Responsible Contact Person: Angie Finley, Executive Director

Categories

HUD Housing Programs Material Weakness Reporting

Other Findings in this Audit

  • 382882 2023-001
    Material Weakness Repeat
  • 382883 2023-001
    Material Weakness Repeat
  • 959323 2023-001
    Material Weakness Repeat
  • 959324 2023-001
    Material Weakness Repeat
  • 959325 2023-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public Housing Operating Fund $267,248
14.871 Section 8 Housing Choice Vouchers $118,386
14.879 Mainstream Vouchers $54,604
14.896 Family Self-Sufficiency Program $30,000