FAC Explorer

Finding 514547 (2022-003)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2024-12-16
Audit: 332864
Organization: Housing Authority of the City of Pueblo (CO)
Auditor: Eide Bailly

AI Summary

  • Core Issue: The Authority failed to document the basis for determining reasonable rent in 10 out of 15 cases tested.
  • Impacted Requirements: Compliance with the requirement to assess and document rent reasonableness for Section 8 Housing Choice Vouchers.
  • Recommended Follow-Up: Implement processes to ensure proper documentation and oversight to prevent potential overpayments in Housing Assistance Payments (HAP).

Finding Text

U.S. Department of Housing and Urban Development ‐ CFDA #14.871 Section 8 Housing Choice Vouchers Applicable Federal Award Number and Year – Section 8 Housing Choice Vouchers ‐ 2022 Special Tests and Provisions – Reasonable Rent Significant Deficiency in Internal Control over Compliance Criteria – The Program requires the Authority to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units at the time of initial leasing and during the term of the HAP contract. Condition – During our testing of reasonable rent, we identified 10 instances when the Authority did not maintain records to document the basis for the determination that rent to owner is reasonable rent. Questioned Costs – None Reported. Context/Sampling – A non‐statistical sample of 15 rent reasonableness verifications were selected for testing. 10 out of the 15 rent reasonableness verifications did not have documentation of the basis for the determination that rent to owner is reasonable rent. Effect – Failure to implement and maintain a proper control process could result in over payment of HAP. Cause – The Authority has experienced significant staff turnover and due to a lack of oversight the appropriate steps were not documented to ensure compliance with the program requirements. Repeat Finding from Prior Year – No. Recommendation – The Authority should ensure that processes are implemented to ensure compliance with program requirements for reasonable rent. Views of Responsible Officials – Management agrees with the finding.

Corrective Action Plan

U.S. Department of Housing and Urban Development – CFDA #14.871 Section 8 Housing Choice Vouchers Special Test and Provisions – Reasonable Rent Significant Deficiency in Internal Control over Compliance Finding Summary: During our testing for reasonable rent, we identified 10 instances when the Authority did not maintain records to document the basis for the determination that rent to owner is reasonable rent. Responsible Individual: Steven Trujillo, Executive Director Corrective Action Plan: During 2022 the Authority experienced significant staff turnover and the appropriate steps, to maintain documentation of the reasonable rent calculation were not followed, therefore we did not ensure compliance with the program. The Housing Authority has implemented a process that requires proper documentation to be maintained when the reasonable rent calculation is completed. Anticipate Completion Date: January 2023

Categories

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

Other Findings in this Audit

  • 514548 2022-004
    Material Weakness Repeat
  • 514549 2022-005
    Significant Deficiency Repeat
  • 514550 2022-006
    Significant Deficiency Repeat
  • 514551 2022-007
    Significant Deficiency Repeat
  • 514552 2022-008
    Significant Deficiency
  • 1090989 2022-003
    Significant Deficiency
  • 1090990 2022-004
    Material Weakness Repeat
  • 1090991 2022-005
    Significant Deficiency Repeat
  • 1090992 2022-006
    Significant Deficiency Repeat
  • 1090993 2022-007
    Significant Deficiency Repeat
  • 1090994 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $10.19M
14.850 Public Housing Operating Fund $3.66M
14.872 Public Housing Capital Fund $2.80M
14.182 Lower Income Housing Assistance Program-Section 8 New Construction/substantial Rehabilitation $547,766
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $133,846
10.405 Farm Labor Housing Loans and Grants $112,500
10.427 Rural Rental Assistance Payments $66,033
14.896 Family Self-Sufficiency Program $49,823