Finding Text
2022– 002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Moving to Work Demonstration
Assistance Listing Number: 14.881
Federal Award Identification Number and Year: DC001VO - 2022
Award Period: October 1, 2021 – September 30, 2022
Type of Finding:
• Material Weakness in Internal Control over Compliance
• Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))). The Authority must ensure that housing assisted under the demonstration meets housing quality standards established or approved by HUD (Section 204(c)(3)(E) of Pub. L. No. 104-134 (42 USC 1437f (note))).
Condition/Context: A sample of 80 tenant files tested for eligibility over MTW-LRPH (40) and MTW HCV (40) found exceptions in 25 of the 40 MTW-LRPH files tested and 23 of the 40 MTW-HCV files tested.
The following MTW-LRPH exceptions were noted:
• For 1 of 40 files tested, we were not provided with any supporting documentation to verify eligibility.
• For 7 of 40 files tested, support was provided, however, CLA did not observe a HUD-50058 with an effective date prior to, and effective for, the rent payment pulled from rent roll.
• For 6 of the 40 files tested, we were unable to recalculate annual family income listed in the tenant file to the backup support provided. We either did not observe backing support to recalculate the annual income listed on the tested HUD-50058 or we did not receive the EIV report.
• For 12 of 40 files tested, we did not observe support in the tenant file indicated that family income and composition were examined on a biennial basis.
• For 5 of 40 tenant files tested, we did not observe a recertification checklist, or the signed Application for Applied Occupancy completed by the specialist.
The following MTW-HCV exceptions were noted:
• For 3 of 40 files tested, supporting documentation was not provided.
• For 12 of the 40 files tested, we were unable to recalculate annual family income listed in the tenant file to the backup support provided. We either did not observe backing support to recalculate the annual income listed on the tested HUD-50058 or we did not receive the EIV report.
• For 10 of the 40 files tested we were unable to determine that recertifications were completed on a biennial basis.
• For 2 of the 40 files tested, we were not provided with the quality control checklist signed by a housing assistant specialist.
• For 3 of the 40 files tested, the HAP per the HUD-50058 did not agree to the HAP register.
Questioned Costs: Unable to determine.
Cause: The Authority did not sufficiently monitor controls to ensure compliance with eligibility requirements.
Effect: The Authority is not in compliance with federal regulations regarding eligibility. Tenant rent may have been miscalculated due to using incorrect information in the rent calculation. Tenant recertifications were not shown to be performed on a timely basis.
Repeat Finding: The finding is a repeat of finding 2021-002 in the prior audit period.
Recommendation: We recommend that DCHA staff review the controls in place to ensure that required eligibility determination documentation is complete, accurate, and available for audit.
Views of Responsible Officials: There is no disagreement with the audit finding.