Finding Text
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Public and Indian Housing
Assistance Listing Number: 14.850
Federal Award Identification Number and Year: CA005/CA007 2022
Award Period: January 1, 2022 – December 31, 2022
Type of Finding:
• Material Weakness in Internal Control over Compliance, Material Noncompliance
Criteria or specific requirement: Eligibility
Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615).
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 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) 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 (24 CFR sections 960.253, 960.257, and 960.259).
(a) The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program.
(b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, near-elderly, displaced, or a person with disabilities.
Condition: During the testing of the LIPH tenant files for the City and the County certain special provision compliance deficiencies were noted.
City:
-12 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications.
-11 instances where the tenant file was missing the HUD9886.
-11 instance where the tenant file was missing the housing authority general release of information form.
-12 instances where the tenant file was missing the lease/rent adjustment letter.
-12 instances where the tenant file was missing the recertification package/application.
-12 instances where the rent posted per register did not agree with the rent per 50058.
-16 instances where the annual recertification checklist was not completed.
County:
-8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications.
-7 instance where the tenant file was missing the HUD9886.
-7 instance where the tenant file was missing the housing authority general release of information form.
-9 instances where the tenant file was missing the lease/rent adjustment letter.
-7 instances where the tenant file was missing the recertification package/application.
-10 instances where the rent posted per register did not agree with the rent per 50058.
-21 instances where the annual recertification checklist was not completed
Questioned costs: None
Context: Out of the 60 files tested for the City, 16 contains errors as noted above. Out of the 60 files tested for the county, 27 contains errors as noted above.
Cause: The Authority failed to provide required documentation to be in compliance with program requirements.
Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the LIPH waiting lists.
Repeat Finding: This is a Repeat finding. (2021-006)
Recommendation: WE recommends management to assign a person that verifies all the documents are in place before processing new move ins.
Views of responsible officials: There is no disagreement with the audit finding.