Finding 479686 (2023-003)

2023-003 ALN 14.850 - Public & Indian Housing Program - Eligibility Condition and Criteria: During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Public & Indian Housing Program eligibility process being compliant with HUD regulatory requirements. EIV reports should be run within 120 days of move-in for new admissions to the program. An EIV report should be run and maintained in the tenant's file at least once annually to meet HUD's documentation requirements. HUD form 9886 needs to be signed annually by the tenants. Rent must be properly calculated or agreed to the Authority's flat rent schedule. The Authority did not maintain EIV reports in the tenant files. Therefore, no evidence of the EIV report being run exists and support for tenants with Social Security income was insufficient. The Authority's internal controls failed to identify one tenant that did not have an executed HUD form 9886 in the file and one tenant that did not have the correct amount of rent calculated. Amount of Questioned Costs: None Context: Of the 20 tenant files tested for eligibility, evidence of the EIV report being ran within 120 days of move-in date for the three new admissions tested was not present. In addition, 7 tenant files did not have evidence of an EIV report being ran at least once annually. In addition, one tenant file tested did not have an executed HUD form 9886 in the file. One tenant's flat rent amount was listed as $206, which did not agree to the Authority's flat rent schedule or any possible calculation for rent. Cause: The Authority did not utilize adequate internal controls over the Public & Indian Housing program as there is a lack of sufficient documentation. The staff under prior management was under the impression that once the EIV report is run, it should be destroyed and not stored in the file. Effect: Adequate supporting documentation was not maintained in the file and income was not adequately supported by the documentation. Auditor’s Recommendation: We recommend the Authority implement controls to run the EIV report within 120 days of move-in for new admissions and at least once annually for all other tenants. The Authority needs to maintain these EIV reports in the tenant files. The Authority should utilize effective controls to ensure relevant documentation is maintained in the Public & Indian Housing program tenant files. Grantee Response: The Executive Director agrees with the finding and will follow the Auditor's recommendation.