Finding 384290 (2023-001)

Significant Deficiency
Requirement
ELN
Questioned Costs
$1
Year
2023
Accepted
2024-03-25

AI Summary

  • Core Issue: The Authority has significant deficiencies in internal controls over compliance with HUD requirements for the Housing Voucher Cluster program.
  • Impacted Requirements: Issues include missing documentation for tenant eligibility, unverified HAP amounts, and incomplete data submissions to the PIC system.
  • Recommended Follow-up: The Authority should enhance internal controls for documentation, ensure accurate HAP payments, and improve data submission processes to maintain compliance.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2022-2023 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register (24 CFR section 982.158 and 24 CFR Part 982, Subpart K). The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 40 files for eligibility requirements, we noted the following in 4 files: - 1 of 40 files tested had a household information form that was not signed/dated by the housing specialist until after the audit sample selections were made. - 2 of 40 files selected were unable to be tested due to the fact that the Authority could not locate the files. - 2 out of 40 files could not be located in the PIC system. The samples were statistically valid samples. Questioned costs: $9,660 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 29 local housing agencies (LHAs) throughout the state to administer the program. Due to the number of LHAs there are inconsistencies among agencies on quality control practices. LHA’s differ in size, staffing patterns, geographic service area, and overall capacity to operate the program. In addition to these differences, the Authority and its partner agencies are still recovering from the lingering impacts of COVID-19. Staff turnover and retention have contributed to challenges in quality control practices. The Authority has actively worked to improve the HCV Program by taking a methodical approach, making intentional decisions about program improvements while balancing the need to make changes quickly to ensure compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review their internal controls over the eligibility requirements to ensure all documentation is maintained at the time of recertification. We recommend the Authority review their internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend the Authority review their process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Housing Choice Voucher Cluster – Assistance Listing No. 14.871/14.879/14.EHV Recommendation: We recommend that the Authority review their internal controls over the eligibility requirements to ensure all documentation is maintained at the time of recertification. We recommend the Authority review their internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend the Authority review their process for uploading data to PIC to ensure each recertification gets submitted. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Authority has begun the assessment, development and implementation of several internal controls to address recertification documentation, HAP processes, and PIC data submission to ensure compliance with Federal regulations. The Authority will develop and implement a quality control process on or before June 30, 2024, to ensure all documentation is maintained, signed and dated by all required parties at the time of certification. Currently, the Authority has developed a checklist system for each step of the recertification process. The checklist includes each step of the recertification process, along with due dates, and responsible entities. While not a Federal Requirement, the Authority did establish the discretionary policy to require housing specialists sign and date the Housing Information Forms. This policy was implemented after this audit finding and would not have been a requirement of the one file reviewed by the audit team. However, this step is included in the checklist process. The Authority is actively working to modify the electronic documentation and record retention system and process. Planned implementation of new electronic documentation and record retention processes is contingent on system updates managed by third party venders, however new written internal procedures are under development. The Authority will develop and implement a quality control process for the HAP process on or before June 30, 2024. This will include procedures for Program Compliance Officers (PCOs) and HCVP’s Accounting Team to work closely and coordinate to ensure each responsible person fully understands their roles and responsibilities. The Authority will implement monthly reviews of HAP payments, by the Housing Choice Voucher Program Compliance Manager. The Authority PCOs and/or accounting staff will follow the procedures for correcting any issues identified during the reviews. Over the past year, the Authority has created a System and Reporting Team that is now responsible for timely PIC submissions and addressing discrepancies and/or errors in the PIC and/or EIV system. By having a dedicated team, the Authority now exceeds the HUD requirement of submitting PIC data within 60 days of the effective date of any action. The Authority submits PIC monthly, performs monthly reviews of PIC data, and ensures staff addresses all fatal errors. In addition to these processes, the System and Reporting Team receives one on one training to address specific and challenging errors and discrepancies. Name(s) of the contact person(s) responsible for corrective action: Yilla Smith, Director, Housing Opportunity Programs and Initiatives Planned completion date for corrective action plan: June 30, 2024

Categories

Questioned Costs HUD Housing Programs Eligibility Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 384291 2023-001
    Significant Deficiency
  • 384292 2023-001
    Significant Deficiency
  • 384293 2023-002
    Material Weakness
  • 384294 2023-002
    Material Weakness
  • 384295 2023-002
    Material Weakness
  • 384296 2023-003
    Significant Deficiency
  • 384297 2023-003
    Significant Deficiency
  • 384298 2023-003
    Significant Deficiency
  • 384299 2023-004
    Material Weakness
  • 384300 2023-004
    Material Weakness
  • 384301 2023-004
    Material Weakness
  • 960732 2023-001
    Significant Deficiency
  • 960733 2023-001
    Significant Deficiency
  • 960734 2023-001
    Significant Deficiency
  • 960735 2023-002
    Material Weakness
  • 960736 2023-002
    Material Weakness
  • 960737 2023-002
    Material Weakness
  • 960738 2023-003
    Significant Deficiency
  • 960739 2023-003
    Significant Deficiency
  • 960740 2023-003
    Significant Deficiency
  • 960741 2023-004
    Material Weakness
  • 960742 2023-004
    Material Weakness
  • 960743 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.U01 Government National Mortgage Association Mortgage Backed Securities Program (note 4) $667.08M
14.117 Mortgage Insurance_homes $516.47M
21.026 Homeowner Assistance Fund $143.86M
64.114 Veterans Housing_guaranteed and Insured Loans $95.36M
14.871 Section 8 Housing Choice Vouchers $3.22M
14.879 Mainstream Vouchers $2.84M
14.169 Housing Counseling Assistance Program $1.23M
14.182 Section 8 New Construction and Substantial Rehabilitation $247,485
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $168,745