Finding 499570 (2023-003)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-09-30

AI Summary

  • Core Issue: The Authority failed to follow proper procedures for determining if rent is reasonable, which is a requirement for compliance.
  • Impacted Requirements: The Authority did not maintain necessary documentation for rent reasonableness, violating federal regulations.
  • Recommended Follow-Up: Implement controls to ensure proper documentation is kept for rent reasonableness assessments moving forward.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: MO002VO - 2023 Award Period: January 1, 2023 – December 31, 2023 Compliance Requirement: Special Tests and Provisions – Reasonable Rent Type of Finding: Significant Deficiency in Internal Control over Compliance Type of Finding:Other Matters Criteria or specific requirement: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract before any increase in the rent to owner. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the Housing Assistance Payment (HAP) contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: The Authority did not perform rent reasonableness procedures in accordance with program compliance requirements. Questioned costs: Unable to determine. Context: Exceptions noted in 1 out of 40 files tested for reasonable rent requirements. Documentation for the determination of rent was not maintained for the 1 sample. Cause: The Authority did not maintain documentation utilized to determine rent reasonableness. Effect: The Authority is not in compliance with rent reasonableness requirements. Repeat Finding: Yes, finding 2022-004. Recommendation: We recommend that the Authority implements controls to ensure that documentation is maintained in accordance with rent reasonableness requirements. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Response to Finding 2023-003 The Authority generally concurs with the auditor’s findings and recommendations. To address the finding related to inadequate documentation for rent reasonableness determinations, the Authority will implement the following corrective actions: 1. Immediate and Ongoing Training: • To ensure consistency, increase staff knowledge, and reduce errors, the Authority will conduct immediate training sessions for all relevant staff, followed by annual refresher training. These sessions will focus on the correct procedures for documenting rent reasonableness and the importance of maintaining accurate and complete records. 2. Enhanced Quality Control and Error Monitoring: • The Authority will increase the frequency of quality control file reviews to identify errors promptly and address their root causes to prevent systemic issues. • Errors will be tracked by type and by the staff member responsible, allowing for the identification of patterns. Additional training will be provided for common error types and to individuals who are frequently responsible for errors. 3. Comprehensive File Reviews: • Quality reviews will be conducted on all files to ensure the presence of all required documents. It is anticipated that the initial comprehensive file review will take approximately one year to complete. • After the initial review, files will be selected randomly for review according to an established quality control schedule. This ongoing review process will ensure continuous compliance and address any issues as they arise. 4. Responsibility for Document Collection: • Each team member will be responsible for collecting any missing documents identified during the annual recertification, interim recertification, or change of unit processes. This accountability measure ensures that all necessary documentation is gathered and maintained consistently. 5. Adoption of a Digital Platform: • As part of the corrective action, the Authority has adopted a digital platform that requires the completion of all necessary fields before a rent determination can be finalized. This platform will also retain all documentation used to determine rent reasonableness for at least two years, ensuring thorough and accessible records. 6. Increased Random Audits: • Effective October 2024, random audits will be increased to monthly reviews to identify any discrepancies early and to ensure ongoing compliance with documentation requirements. Name of the contact person responsible for corrective action: Deputy Executive Director LaMonyka French Completion Date: December 2024

Categories

HUD Housing Programs Special Tests & Provisions Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 499568 2023-001
    Significant Deficiency Repeat
  • 499569 2023-002
    Significant Deficiency Repeat
  • 499571 2023-004
    Significant Deficiency Repeat
  • 499572 2023-001
    Significant Deficiency Repeat
  • 499573 2023-002
    Significant Deficiency Repeat
  • 499574 2023-003
    Significant Deficiency Repeat
  • 499575 2023-004
    Significant Deficiency Repeat
  • 499576 2023-001
    Significant Deficiency Repeat
  • 499577 2023-002
    Significant Deficiency Repeat
  • 499578 2023-003
    Significant Deficiency Repeat
  • 499579 2023-004
    Significant Deficiency Repeat
  • 1076010 2023-001
    Significant Deficiency Repeat
  • 1076011 2023-002
    Significant Deficiency Repeat
  • 1076012 2023-003
    Significant Deficiency Repeat
  • 1076013 2023-004
    Significant Deficiency Repeat
  • 1076014 2023-001
    Significant Deficiency Repeat
  • 1076015 2023-002
    Significant Deficiency Repeat
  • 1076016 2023-003
    Significant Deficiency Repeat
  • 1076017 2023-004
    Significant Deficiency Repeat
  • 1076018 2023-001
    Significant Deficiency Repeat
  • 1076019 2023-002
    Significant Deficiency Repeat
  • 1076020 2023-003
    Significant Deficiency Repeat
  • 1076021 2023-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $8.52M
14.872 Public Housing Capital Fund $5.87M
14.889 Choice Neighborhoods Implementation Grants $4.22M
14.871 Section 8 Housing Choice Vouchers $1.76M
14.879 Mainstream Vouchers $1.17M
14.896 Family Self-Sufficiency Program $299,507
14.870 Resident Opportunity and Supportive Services - Service Coordinators $112,250