FAC Explorer

Finding 480839 (2023-001)

Significant Deficiency Repeat Finding
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2024-08-09
Audit: 316970
Organization: Springfield Housing Authority (IL)
Auditor: Rector Reeder & Lofton PC

AI Summary

  • Core Issue: Sixteen out of forty-six tenant files were found noncompliant, with a 10.8% error rate related to adjusted annual income.
  • Impacted Requirements: Compliance with federal regulations and HUD guidelines for maintaining accurate tenant files is not being met.
  • Recommended Follow-Up: Continue monitoring internal controls and consider additional training or controls to ensure compliance and improve accuracy.

Finding Text

Finding 2023-001- Public Housing Tenant Files - Ellglblllty- Internal Control over Tenant Files - Noncompllance and Significant Deficiency Low Income Public Housing - ALN 14.850 Condition & Cause: We randomly selected forty-six (46) tenant files for review. We noted sixteen (16) tenant files were out of compliance in one or more categories. Of these, five (5) files, or 10.8%, were impacted by errors related to adjusted annual income. We were able to extrapolate identified misstatements of rental charges and found the potential misstatement to represent 0.48% of program rental revenue, which is immaterial to the financial statements. In our review, we noted: • Twelve (12) files for which the reexamination EIV was either missing or pulled at least a couple of months after the effective date; • Three (3) instances of miscalculations of annual income; • Two (2) instances of improper or missing income verification; • Two (2) instances of improper deductions; and • One (1) annual reexamination that was conducted more than three months late. We noted that the Agency has experienced difficulty in hiring and retaining quality staff. The Public Housing department was understaffed for a large portion of the audit period under review. However, we noted that the 10.8% income-related error rate in the current audit period is down from 22% reported in the prior audit period. Criteria: The Code of Federal regulations, the Housing Authority's ACOP, and specific HUD guidelines in documenting and maintaining the Public Housing tenant files. Effect: The failure to properly verify and calculate the dwelling rent charged to a resident can result in a misstatement of operating income and corresponding operating subsidy earned by the Housing Authority. Additionally, rental charge misstatements may cause an undue financlal burden on the participant, which is incongruent with the mission of the Agency. Recommendation: We note that the Authority has already implemented internal quality control processes for most actions affecting the tenant files. We recommend continuing monitoring implemented internal controls for improvement and, if necessary, installing additional controls or staff training as needed to meet compliance standards. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Viewsof responsible officials: The PHA agrees withtheresults of the audit and recommendations.

Corrective Action Plan

FINDING 2023-001 "Public Hous;ng Tenant Fffes - fllgibility- tnrerno/ Control Over Tenant Files Non-Compliance and Significant Deficiency" SHA RESPONSE The Springfield Housing Authority acknowledges the five (5) errors as delineated in the full 2023 FYE audit report. The identified errors constitute a 54% reduction in file errors from fY 2022. In 2023, the Springfield Housing Authority Public Housing program employed three (3} Asset Managers, three (3) Occupancy Specialists and one (1) Program Integrity Specialist. Due to continuing post COVID-19 turnover and lack of qualified workers in the local workforce, the SHA continued to experience a higher than usual turnover rate Ir, the positions that conduct rent calculattons duringthe majority of FY2023. Thepositions began to stabilize by the 4th quarter of 2023. The primary function of the Program Integrity Specialist position is to audit and quality control tenant files and rent calculations conducted by Occupancy Specialists. The Asset Managers are responsible for reviewing 3% of recertifications audited by the Program Integrity Specjalist position as an additional quality controlmeasure. Further, during the auditor's closeout meetingwith the SHA Management team, the auditors indicated that the SHA team conducted necessary file audits and identified deficiencies, however the corrections were not timely. This error rate was directly attributable to the continued high turnover rate of Occupancy Specialists during the 2023 fiscalyear. The SHA will take the following corrective actions to correct the errors and/or prevent the errors moving forward: • The Program Integrity Specialist will conduct reviews of 100% of annual and interim recertiflcations for publlc housing tenants by December 31, 2024. • The Program Integrity Specialist will ensure 100% audited file corrections are completed by the Occupancy Specialists, monthly. • The Asset Manager(s) will review 10% of the recertifications audited by the Program Integrity Specialist as an additional quality control measure by December 31, 2024. • The Asset Managers, Occupancy Specialists and Program Integrity Specialist will be provided with additional internal andexternal trainingopportunities In low rent public housingrentcalculations and program integrity by December 31, 2024. • The Asset Managers will re-review the files identified with erro)J.during the independent audit and resolve the errors in accordance with the SHA Admissions and Cbntl nued Occupancy Plan and HUD rules and regulations by September 30, 2024. Person Responsible: Melissa Huffstedtler, Deputy Director Anticipated Completion Date: December 31, 2024

Categories

HUD Housing Programs Subrecipient Monitoring Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 480840 2023-002
    Significant Deficiency
  • 1057281 2023-001
    Significant Deficiency Repeat
  • 1057282 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $3.63M
14.872 Public Housing Capital Fund $2.86M
14.879 Mainstream Vouchers $1.31M
14.871 Section 8 Housing Choice Vouchers $315,720
14.896 Family Self-Sufficiency Program $276,504
14.870 Resident Opportunity and Supportive Services - Service Coordinators $69,787