Finding 2020-003
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program
Federal Catalog Numbers: 14.850
Material Noncompliance – E. Eligibility – Tenant Files
Non Compliance Material to the Financial Statements: Yes
Significant Deficiency in Internal Control over Compliance for Eligibility
Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516).
Condition: Based upon inspection of the Authority’s files and on discussion with management there were a significant number of documents that were unavailable for examination at the time of audit.
Context: Of a sample size of twenty-six (26) tenant files, the following information was unavailable for examination at the time of audit:
Verification of income and assets was missing in four (4) files
Our sample size is statistically valid.
Known Questioned Costs: $24,672
Likely Questioned Costs: $1,163,758
Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance.
Effect: The Public and Indian Housing Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Views of responsible officials and planned corrective action: The Authority has recognized the deficiencies in the Public and Indian Housing Program and will implement internal control procedures that will ensure compliance with federal regulations. Ralph Staley, CFO is responsible for ensuring proper internal controls are in place to prevent significant deficiencies and material weaknesses from occurring and is expected to be completed by December 31, 2024.