Finding 498671 (2023-001)

Significant Deficiency
Requirement
A
Questioned Costs
$1
Year
2023
Accepted
2024-09-26

AI Summary

  • Core Issue: The Authority made significant overpayments to landlords for Housing Assistance Payments (HAP) due to a software conversion error.
  • Impacted Requirements: This situation violates HUD regulations regarding the proper calculation and disbursement of HAP funds.
  • Recommended Follow-Up: The Authority should recover overpaid funds and enhance monitoring of internal controls in the new software system.

Finding Text

Allowability - Landlord Overpayments Housing Voucher Cluster Significant Deficiency in Internal Control Other Matter to be Reported Under the Uniform Guidance Condition: The Authority made numerous overpayments in HAP to landlords starting in the month of October 2023. A variance in HAP disbursements was noted by the Department of Housing and Urban Development (HUD), and upon further investigation by management it was determined that the overpayment to landlords was not caught by staff when the original disbursements were made. Criteria: HUD enters into Annual Contributions Contracts (ACCs) with PHAs under which HUD provides funds to the PHAs to administer the HCV program locally. HUD provides funds for the payments to landlords based on the Authority’s 50058 calculation. Amounts paid to landlord should be based on those calculations. Context: The Authority notified the auditor at the beginning of the audit when management became aware of the overpayment issue. Effect: The Authority is not in compliance with applicable regulations regarding allowable use of HAP funds. Cause: The Authority underwent a software conversion during the year which caused issues with the landlord payment module for HCV. There was inadequate review performed on the process and controls over the posting of HAP payments to landlords within the new system that allowed for the error to continue until April 2024. Questioned Costs: $242,129, during fiscal year. Auditor Recommendations: The Authority should work on recapturing overpaid funds from landlords that have current tenant agreements. The Authority should also monitor internal controls in place with the new software to make sure the accounting software is functioning properly. Management Response: See Corrective Action Plan.

Categories

Questioned Costs HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 498669 2023-001
    Significant Deficiency
  • 498670 2023-001
    Significant Deficiency
  • 1075111 2023-001
    Significant Deficiency
  • 1075112 2023-001
    Significant Deficiency
  • 1075113 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $1.62M
14.850 Public Housing Operating Fund $1.18M
14.879 Mainstream Vouchers $1.01M
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $494,227
14.872 Public Housing Capital Fund $265,073
14.896 Family Self-Sufficiency Program $122,000