Finding 480840 (2023-002)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-08-09

Audit: 316970

Organization: Springfield Housing Authority (IL)

Auditor: Rector Reeder & Lofton PC

AI Summary

Core Issue: 45 out of 110 tenant files were found noncompliant, primarily due to late annual reexaminations and income verification errors.
Impacted Requirements: Compliance with federal regulations and the Housing Authority's guidelines for maintaining tenant files is at risk, potentially affecting funding and participant support.
Recommended Follow-Up: Continue monitoring and enhancing internal controls and staff training to ensure compliance and improve file management.

Finding Text

Finding 2023-002 - Housing Choice Voucher Tenant Flies - Eligibility - Internal Control over Tenant Files - Noncompliance & Significant Deficiency Housing Choice Voucher Program -ALN 14.871 Condition & Cause: We randomly selected one hundred ten (110) tenant files for review. We noted forty-five (45) tenant files were out of compliance in one or more categories. Of these, seven (7) files, or 6.3% of our sample, were impacted by errors related to adjusted annual income. We were able to extrapolate identified misstatements of HAP and found the potential misstatement to represent 0.19% of program I-IAP expense, which is immaterial to the financial statements. In our review, we noted: • Thirty-eight (38) annual reexaminations that were conducted more than three months late; • Four (4) instances of miscalculations of annual income; • Three (3) instances of missing or improper income verification; • One (1) instance of improper verification of deductions; and • One (1) file that was missing the action under review. We noted that the Agency has experienced difficulty in hiring and retaining quality staff. The Housing Choice Voucher department had many staff vacancies, including the position of HCV Director, during the audit period under review. Criteria: The Code of Federal regulations, the Housing Authority Administrative Plan and specific HUO guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Failure to complete timely reexaminations or properly verify and calculate annual income can result in a misstatement of HAP expense leading to improper funding for the HCV program. Misstatements of HAP may cause an undue financial burden to the participant, which is incongruent with the mission of the Agency. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. 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 Co5ts: None Repeat Finding: No Was sampling statistically valid? Yes Viewsof responsible officials: The PHA agrees with the results of the audit and recommendations.

Corrective Action Plan

FINDING 2023-002 "Housing Choice Voucher Tenant Files - Eligibility - Internal Control over Tenant Files - Noncompliance & Significant Deficiency " SHA RESPONSE The Springfield Housing Authority acknowledges the seven (7) errors as delineated in the full 2023 FYE audit report. In 2023, the Springfield Housing Authority Housing Choice Voucher program delineated the following positions to undertake Income and rent calculations: one {l) Special Programs Coordinator, four (4) HCV Specialists and one {1) Program Integrity Specialist. Of those six (6) employees, only onehas a tenure longer than 12 months. Due to continuing post COVID-19 turnover and lack of qualified workers in the local workforce, the SHA expertenced a higher than usual turnover rate in the HCV positions that conduct rent calculations during the majority of FY2023. The Springfield Housing Authority hired third party consultants to assist with annualrecertificationsin the 3rd Quarter of 2023. The primary function of the Program Integrity Specialist position ls to audit and quality control tenant files and rent calculations conducted by HCV Specialists. The HCV Director and/or HCV Manager is responsible for reviewing 3% of recertiflcations audited by the Program Integrity Specialist position as an additional quality control measure. This error rate was directly attributable to the unprecedented turnover rate of HCV Specialists duringthe 2023 fiscal year. The SHA will take the following corrective actions to correct the errors and/or prevent the errors moving forward: • The Program Integrity Speclalist will conduct reviews of 100% of annual and interim recertificatlons for HCV program participants by December 31, 2024. • The Program Integrity Specialist will ensure 100% audited file corrections are completed by the HCV Specialists, monthly. • The HCV Director and/or Manager will review 10% of the recertifications audited by the Program Integrity Speclallst as an additional quality controlmeasure by December 31, 2024. • The HCV Director, HCV Manager, HCV Specialists and Program Integrity Specialist will be provided with additional internal and external training opportunities in Housing Choice Voucher program income andrent calculations andprogram Integrity by December 31, 2024. • The HCV Manager will re-review the flies Identified with errors during the independent audit and resolve the errors in accordance with the SHA Administrative Plan and HUD rules and regulations by September 30, 2024. Person Responsible: Melissa Huffstedtler, Deputy Director Anticipated Completion Date: December 31, 2024

Other Findings in this Audit

480839 2023-001

Significant Deficiency Repeat
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