Finding 390304 (2023-001)

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

AI Summary

  • Core Issue: There are significant deficiencies in internal controls related to tenant eligibility for the Public and Indian Housing Program, affecting compliance with HUD requirements.
  • Impacted Requirements: The Authority's policies and 24 CFR 960.259 require complete and accurate tenant files, which were not met due to missing documentation and late recertifications.
  • Recommended Follow-Up: The Authority should reevaluate and strengthen procedures to ensure compliance, address the noted deficiencies, and assess the impact on all tenant files.

Finding Text

2023-001 Eligibility Public and Indian Housing Program - AL No. 14.850 Significant deficiency in internal control Other matter required to be reported in accordance with Uniform Guidance Condition: Out of an approximate population of 2,083 tenants, 44 tenant files were tested and the following deficiencies were noted: • 1 file was missing the support packet for the fiscal year 2023 recertification including but not limited to income support, third party verification, and flat rent sheet, • 3 files had late recertifications, • 2 files were missing support of inspection, • 1 file was missing tenant wage support, and • 1 file was missing a valid 9886 form. Context: The auditor haphazardly selected 44 tenant files out of the population, which is considered to be a statistically valid sample. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Authority is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Criteria: The Authority’s Admissions and Continued Occupancy Policy (“ACOP”) and 24 CFR 960.259 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding complete and accurate tenant files. Cause: The Authority experienced staffing turnover and did not have the available staff to fully implement the established internal controls to ensure proper compliance with regards to timely recertifications and collection of required HUD documentation to complete a tenant file. Effect: The Authority is not in full compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: None. Auditor’s Recommendations: The Authority should consider reevaluating their established procedures and controls in place to ensure full compliance in regards to eligibility. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. View of Responsible Officials: See Corrective Action Plan.

Corrective Action Plan

2023-001 Eligibility Public and Indian Housing Program - AL No. 14.850 Significant deficiency in internal control Other matter required to be reported in accordance with Uniform Guidance Condition: Out of an approximate population of 2,083 tenants, 44 tenant files were tested and the following deficiencies were noted: • 1 file was missing the support packet for the fiscal year 2023 recertification including but not limited to income support, third party verification, and flat rent sheet, • 3 files had late recertifications, • 2 files were missing support of inspection, • 1 file was missing tenant wage support, and • 1 file was missing a valid 9886 form. Auditor Recommendations: The Authority should consider reevaluating their established procedures and controls in place to ensure full compliance in regards to eligibility. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. Action Taken: • 1 file was missing the support packet for the fiscal year 2023 recertification LaTonia Young, Director of Asset Management, lyoung@memphisha.org, 901-544-1129, is working with the new Community Manager to make the corrections for the missing information no later than April 30, 2024. Going forward Tomecia Brown, Director of Compliance and Training, tbrown1@memhisha.org, 901-544-6402, will continue to conduct file reviews to ensure that the required documentation is in the file. •3 files had late recertifications. We will ensure that all recertifications are completed within 30 – 120 days of the effective date. Tomecia Brown, Director of Compliance and Training, will complete a recertification due review on a monthly basis effective April 1, 2024. • 2 file was missing support of inspection. LaTonia Young, Director of Asset Management, will ensure that all units are inspected on an annual basis. In our monthly site staff meeting, Asset Management will inform staff to ensure that all inspections are in the file. • 1 file was missing tenant wage support. We will have the new Community Manager verify wages and make corrections by April 5, 2024. MHA will be sending the owner a non-compliance letter no later than April 30, 2024. Tomecia Brown, Director of Compliance and Training, will continue to complete file reviews on a monthly basis and train staff on the Public Housing process. • 1 file was missing a valid 9886 form. Tomecia Brown, Director of Compliance and Training, will continue to conduct file reviews to ensure that the HUD 9886 form is in the file for all Public Housing sites effective April 23, 2024.

Categories

HUD Housing Programs Eligibility Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 390305 2023-002
    Significant Deficiency
  • 966746 2023-001
    Significant Deficiency
  • 966747 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.872 Public Housing Capital Fund $9.84M
14.850 Public and Indian Housing $7.31M
14.889 Choice Neighborhoods Implementation Grants $4.04M
14.879 Mainstream Vouchers $1.93M
14.871 Section 8 Housing Choice Vouchers $1.09M
14.896 Family Self-Sufficiency Program $71,438
14.870 Resident Opportunity and Supportive Services - Service Coordinators $53,235