Finding 498580 (2023-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-09-26

AI Summary

  • Core Issue: The Authority failed to verify reasonable rent for five out of 25 tenant applications before approval.
  • Impacted Requirements: Compliance with the requirement to determine reasonable rent at lease-up was not met, leading to potential noncompliance.
  • Recommended Follow-Up: Enhance internal controls to ensure compliance with reasonable rent and other grant requirements moving forward.

Finding Text

U.S. Department of Housing and Urban Development Housing Voucher Cluster Section 8 Housing Choice Vouchers – AL # 14.871 Finding Type- Immaterial Noncompliance; Material weakness in internal control over compliance Criteria – The Authority is required to determine the rent to the owner is reasonable when the tenants initially enter into the program (lease-up). An application with a monthly rent in excess of the range of area averages should be rejected with a rent not exceeding this range proposed as an reasonable rent. The Authority is required to maintain records which support that this was performed on all new leases. Condition – The Authority did not determine rents were reasonable in five of the 25 tenants that were selected for testing prior to approving the rent amount noted in the application. Cause – Internal controls in place did not ensure compliance with the Reasonable Rent compliance requirement was maintained during the year. Effect or Potential Effect – The Authority was not in compliance with the Reasonable Rent compliance requirement. Recommendations - We recommend the Authority enhance internal controls to ensure internal controls over the Reasonable Rent and other grant compliance requirements are established to ensure compliance is maintained. Views of Responsible Officials and Planned Corrective Actions - Management agrees with this finding. Management will review and update internal controls to ensure the Authority maintains compliance.

Corrective Action Plan

U.S. Department of Housing and Urban Development Housing Voucher Cluster (Section 8 Housing Choice Vouchers AL # 14.871) Material Weakness 2023-001 Special Tests – Reasonable Rent Recommendation: We recommend the Authority enhance internal controls to ensure internal controls over the Reasonable Rent and other grant compliance requirements are established to ensure compliance is maintained. Plan of Action: The Authority agrees with this finding. Prior to audit, the Authority had begun taking steps to correct this issue after an internal audit of tenant files determined that Rent Reasonableness documentation was missing. The steps that have been take are: 1. Employees were made aware of the issue, and training was provided to ensure that rent reasonable was reviewed and documented. 2. The use of a check list was developed to ensure the rent reasonableness steps and documentation has been performed and included in the tenant file. Going forward additional steps to ensure correction of the finding have been added. Two lines have been added to the check list. The first line is for the Eligibility Specialist to initial that all steps in the checklist have been performed and documented. The next line is for the HCV Specialist to initial that they have received the file and reviewed it to make sure that all steps of the checklist have been completed and documented within the file. Date of implementation: July 13, 2023

Categories

HUD Housing Programs Internal Control / Segregation of Duties Material Weakness

Other Findings in this Audit

  • 1075022 2023-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.879 Mainstream Vouchers $631,208
14.871 Section 8 Housing Choice Vouchers $369,708
14.872 Public Housing Capital Fund $224,478
14.850 Public Housing Operating Fund $163,598