Finding 389655 (2023-001)

Significant Deficiency
Requirement
E
Questioned Costs
$1
Year
2023
Accepted
2024-03-29

AI Summary

  • Core Issue: Tenant annual income was incorrectly calculated, leading to higher housing assistance payments.
  • Impacted Requirements: The PHA failed to follow 24 CFR sections regarding income verification and annual reexaminations.
  • Recommended Follow-Up: Strengthen review processes and implement a secondary review for tenant eligibility and rent determinations.

Finding Text

Criteria In accordance with 24 CFR sections 5.230, 5.609 and 960.259, the PHA must, 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, including third-party verification of (1) 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 incomebased rent. Based on those factors, the PHA must determine income eligibility and calculate the tenant's rent payment using the documentation from third party verification. The PHA must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification. Statement of Condition In our sample of 40 program participants, we noted one instance in which the tenant's annual income was not calculated in accordance with the relevant program requirements. Statement of Cause/Possible Asserted Effect The instances discussed above were the result of the controls to support review of tenant files for required documentation and tenant rent and housing assistance payment calculations not operating effectively. This deficiency in controls resulted in erroneous tenant annual income calculations in all the cases. Reference Number Finding No. 2023-001 Eligibility (continued) Questioned Costs In the first instance, the tenant's annual income was incorrectly calculated.. This resulted in a higher housing assistance payment (HAP) for 4 month. There were no questioned costs associated with this instance. Perspective Information Sampling method- The sample was not intended to be, and was not, a statistically valid sample. Total fiscal year 2023 HAP expenditures associated with the 40 program participants tested in our sample was approximately $406,404. The total population of HAP payments made during FY 2023 was approximately 41.0 million. Identification of Repeat Findings This finding is a repeat of a finding in fiscal year 2021, Reference Number 2021-001 Eligibility. That finding was not corrected in 2022. Recommendation The Authority should strengthen controls over its review processes regarding tenant eligibility and rent determinations, including that the correct information is used to determine rent amounts. We recommend that the Authority implement a secondary review procedure of annual recertifications for tenant files. Views of Responsible Officials Management agrees with this finding.

Corrective Action Plan

Corrective action plan: • On the first Friday of each month, the Housing Choice Voucher Program staff meets to discuss program policies and procedures for training purposes. At each meeting, specific aspects of administering the program are reviewed, along with the related HUD policies. Staff members are given the opportunity to ask any questions on any procedures or policies they may not understand. Activities from the Nan McKay Rent Calculation training are passed out to staff to complete individually. After staff completes the activity, the answers are reviewed as a group. Other activities take place which involve the staff answering questions regarding various case studies of situations that may occur in the daily activities of administering the HCV Program. • January 9th – 11th, all HCV and PBV Specialist received Combo HCV/LIPH Rent Calculation training with HOTMA updates from Nan McKay and Associates. • Review and update Administrative Plan/SOP with Policies and Procedures to ensure all staff is familiar with policies and procedures. • Staff restructuring • In-service meetings with Compliance Specialist as staff challenges some write ups of deficiencies to ensure that there are mutual understandings of policies. • HCV/Occupancy Specialists have been instructed to triple check all certifications for accuracy to mitigate the possibility for careless errors PERSONS INVOLVED HCV Case Management Staff Asset Manager RAD Project Based Voucher Community Manager Compliance Specialist Compliance Supervisor HCV Program Director Occupancy Specialist MONITORING The Compliance Supervisor and Specialist will continue to monitor files. The Compliance Supervisor and Specialist will begin adding the CFR Regulation and or Administrative Plan Policy and page number to each deficiency write-up to assist staff in understanding the error so that staff will not make consistent errors. The Compliance Supervisor will provide to staff recommendations for improvement. It is hopeful that a greater number of participant files will be audited throughout the year for both the HCV Program and for the PBV communities. On the first Friday of each month, the Housing Choice Voucher Program staff meets to discuss program policies and procedures for training purposes. During these meetings specific aspects of administering the program are reviewed, along with the related HUD policies. Staff members are given the opportunity to ask any questions on procedures or policies they may not understand. During many meetings, activities from the Nan McKay Rent Calculation training are passed out to staff to complete individually. After staff completes the activity, the answers are reviewed as a group. Staff also answers questions regarding various case studies that may occur in the daily activities of administering the HCV Program. We also have NRHA’s Compliance staff provide training to review common errors and to discuss any areas staff may have that are gray with audited files. Staff has also gone through an intensive training on the common errors per NRHA’s Compliance Department. Quarterly Quality Control trainings are held with caseworkers lead by the NRHA Compliance Department to address concerns and common errors. The Admission and Continued Occupancy Policies (ACOP) and Administrative Plan policies and procedures are reviewed to ensure that all staff has a clear understanding of the proper ways of calculating income, applying allowances, using proper payment standards, and approvals of lease ups and completion of certifications. A departmental quality control team was established to ensure there is consistency of policies and procedures and that when new procedures are implemented the processes are properly documented and disseminated to all staff. A departmental quality control sub-team was formed after the audit to include the actual custodians of program participant files comprised of:  1 Tax Credit PBV Property Manager  1 LIPH Property Manager  1 Compliance Specialist  1 Occupancy Specialist  1 Senior HCV Specialist  1 Tax Credit Administrative Assistant NRHA Caseworkers and Administrative Staff have been instructed to triple check all certifications for accuracy to mitigate the possibility for careless errors. The NRHA Compliance Department continues to audit files for the HCV Program to ensure that files are being processed properly; income calculated correctly, verifications are in the file, HAP payments issued are correct, and that units are inspected timely. Findings are noted and must be corrected by the Case Worker or Administrative Staff and the file is reevaluated by the Compliance Department to ensure findings were corrected. NRHA Caseworkers and Administrative Staff have been instructed to triple check all certifications for accuracy to mitigate the possibility for careless errors. The NRHA Compliance Department continues to audit files for the HCV Program to ensure that files are being processed properly; income calculated correctly, verifications are in the file, HAP payments issued are correct, and that units are inspected timely. Findings are noted and must be corrected by the Case Worker or Administrative Staff and the file is reevaluated by the Compliance Department to ensure findings were corrected. NRHA will continue to investigate the possibility of increasing the number of program participant files reviewed by the Compliance Department. NRHA has begun contract negotiations with a new software vendor. It is the feeling of the agency that with a different software platform the errors being made will lessen as the information gathered to perform rent calculations will be in a more automated form. It is anticipated that this will lessen staff time needed to enter the information and thus allow for more time to be spent verifying accuracy of information. The timeline for implementation is for the software to be live at the beginning of the 2026 fiscal year. This over-riding strategy is to be done in conjunction with the steps outlined below to mitigate this situation.

Categories

Questioned Costs HUD Housing Programs Eligibility

Other Findings in this Audit

  • 966097 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Housing Choice Vouchers $43.95M
14.850 Public Housing $15.84M
14.889 Choice Neighborhoods Implementation Grants $8.26M
14.872 Public Housing Capital Fund Program $5.81M
14.239 Home Investment Partnership Program $933,581
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $385,929
14.218 Community Development Block Grant $226,999
14.871 Emergency Housing Vouchers $216,045
14.896 Pih Family Self-Sufficiency Program $207,053
14.879 Mainstream $203,330
14.870 Resident Opportunity and Support Services $127,826