Finding Text
2023 – 003: Income and Asset Verification
Federal agency: U.S. Department of Housing and Urban Development
Federal program title: Housing Choice Voucher Cluster
Assistance Listing Number: 14.871, 14.879
Award period: January 1, 2023 – December 31, 2023
Type of Finding:
• Internal Control, Material Weakness in Internal Control over Compliance
• Material Noncompliance
Criteria or specific requirement: Income reported on the tenant assistance application was verified by the housing specialist by obtaining 3rd party verification of annual income. (3rd party verification includes direct confirmation from an employer, at least 4 paystubs, EIV report (required for 10/09 and later), SS award letter, printouts from Dept of Social Services for TANF, child support, etc.) (24 CFR 985.516).
Assets reported on the tenant assistance application were verified by the leasing specialist by obtaining 3rd party verification of assets. If the tenant listed bank accounts, the PHA must obtain account balances from the bank or copies of bank statements. If the tenant receives SS income or wages, look at these forms to see if there is any indication of direct deposit. If so, the PHA should have gotten bank statements). (24 CFR 985.516).
HAP/TAP was properly calculated using all verified information from above and was inputted into the HUD 50058 calculation. If the income reported is not correct per #2 above or there was no 3rd party verification of assets, this is incorrect as well.
Condition: The Authority's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the criteria section of this finding.
Questioned Costs: Known - Unknown | Likely - Undeterminable
Context: From a sample of sixty (60) program participant files selected for testing, two (2) tenant files did not maintain evidence of completion of income verification as a part of the annual re-examination and six (6) tenant files did not contain third party verification of assets. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.
Cause: The Authority's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding.
Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the 24 CFR sections 985.516.
Repeat Finding: Yes; 2022-003
Recommendation: We recommend that the Authority review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria.
Views of responsible officials: There is no disagreement with the audit finding.