Finding Text
Finding: 2023-001
Program Name: Moving to Work (ALN #14.881)
Federal Awarding Agency: Department of Housing and Urban Development
Compliance Requirement: Eligibility
Type of Finding: Material Weakness; Material Noncompliance Qualification
Criteria: Per 24 CFR section 982.516, the Authority must reexamine family income and composition at least once every two years and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification.
Condition: Of the 25 Housing Choice Voucher tenant files tested, the annual recertification was not completed for five tenant files and the information from the prior year 50058 was rolled forward without verification of current income. For two additional tenant files, the 50058 was rolled forward without updating as required; however, the income was later recertified.
Cause: During fiscal year 2023, the Authority had employee turnover resulting in a backlog of recertifications. Because payments to landlords on the annual HAP contracts were set to expire, the Authority rolled forward the tenant’s prior year form HUD-50058 Family Report without updating family income and composition.
Effect: The Authority was not in compliance with the eligibility compliance requirements for the year ended June 30, 2023. Failure to perform income recertifications could result in improper housing assistance payments.
Auditor Recommendation: We recommend the Authority perform a review of all tenant files to ensure income has been appropriately recertified and housing assistance payments are accurate.
Questioned Costs: Undeterminable.
Management’s Response: LMHA has implemented a comprehensive plan to resolve the backlog of recertifications that necessitated the roll forward of tenant’s prior year form HUD-50058 family report without updating family income and composition. First and foremost, representing the rolling forward of the tenant’s HUD-50058 as a biennial recertification has been discontinued. Compliance staff has implemented training of Housing Specialists and other staff to assure biennial recertification and use of HUD-50058 Type 2 (“Annual Recertification”) will now be compliant. LMHA has contracted with a vendor to assist with the recertification process. LMHA has also restructured workflows to provide efficiencies and accountability that will promote compliance. LMHA is also working with various HUD departments and personnel to assess noncompliance and how to move forward. In addition to resolving these issues with HUD, LMHA has engaged its Financial Auditor, Cherry Bekaert, to review the Housing Choice Voucher Program for process, compliance, and internal control.