Finding 513904 (2023-002)

2023-002 – ALN 14.850 – Public & Indian Housing – Eligibility Condition and Criteria: During our audit, it was determined that internal control deficiencies over compliance existed over the Authority’s Public & Indian Housing program eligibility determination process. The Authority's staff had inadequate internal controls over the Authority’s Public & Indian Housing tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. Seven of twenty-five tenant files tested for eligibility compliance, all of these files did not have current EIV (Enterprise Income Verification) documentation. Three of the twenty-five tenant files tested lacked supporting documentation for income and eligibility determination. In accordance with HUD eligibility compliance requirement, Uniform Guidance Single Audit compliance requires that for tenant eligibility, tenant files include certain information and documentation that is both accurate and complete such as to obtain and document third-party verification of annual income and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the rent payment using this documentation. Per 24 CFR sections 5.230, 5.609, & 982.516, tenants are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility. Amount of Questioned Costs. None. Context: Seven of twenty-five tenant files tested for eligibility compliance, all of these files did not have current EIV (Enterprise Income Verification) documentation. Three of the twenty-five tenant files tested lacked supporting documentation for income and eligibility determination. Cause: The Authority did not have proper quality control procedures in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications were not operating effectively. The Authority lacked a clear understanding of HUD Low Rent eligibility requirements relating to the EIV system and HUD documentation requirements. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. Auditor’s Recommendation: In general, we recommend that the Authority review documentation requirements regarding tenant files. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. We also recommend that Authority staff to obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or changed to the public housing industry. Grantee Response: Current management acknowledges the finding and is following the auditor’s recommendations.