Finding 516962 (2024-002)

Material Weakness
Requirement
E
Questioned Costs
$1
Year
2024
Accepted
2024-12-27

AI Summary

  • Core Issue: 25% of tenant files reviewed showed errors in income verification and calculations, impacting compliance with federal regulations.
  • Impacted Requirements: Noncompliance with the Code of Federal Regulations and Housing Authority policies may lead to incorrect rental charges and financial misstatements.
  • Recommended Follow-Up: Conduct a thorough audit of tenant files and enhance staff training and quality control reviews to ensure compliance and accuracy.

Finding Text

Finding 2024-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance & Material Weakness Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of forty (40) Low Rent Public Housing tenant files identified noncompliance in ten (10) files, or 25% of our sample. All instances of noncompliance were related to the verification and calculation of adjusted annual income. Common errors included: • Failing to properly verify and report income or allowances on the 50058 forms from the Application for Continued Occupancy and/or the EIV system • Using nonconsecutive pay stubs to calculate average gross pay • Conducting improper year-to-date analyses We observed that the Agency faced challenges in hiring, training, and retaining qualified staff throughout the fiscal year. This likely contributed to lapses in adherence to regulations, affecting the accuracy of tenant income calculations. We feel that the conditions are present to potentially have a material impact on the financial statements. Criteria: The Code of Federal Regulations, the Housing Authority’s Admissions and Continued Occupancy Policy (ACOP), and specific HUD guidelines in documenting and maintaining Public Housing tenant files. Effect: Improper calculation and documentation of tenant income can lead to incorrect calculation of rental charges and misstatements in the financial statements. Ongoing noncompliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the Public Housing program. Recommendation: We recommend that the Agency perform a comprehensive audit of tenant files for existing tenants to identify any additional deficiencies and assess the need for further staff training. Additionally, we suggest that the Agency enhance its quality control reviews to effectively monitor compliance with local and federal regulations regarding the maintenance of tenant files. Questioned Costs: Based on our extrapolation, we estimate that the likely questioned costs are approximately $49,346. This amount accounts for 2.27% of dwelling rental income. Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Corrective Action Plan

Finding 2024·002 - Low Rent Public Housing Tenant Files - Eligibility- Rent Calculations Noncompliance & Material Weakness Low Rent Public Housing-ALN #14.850 Corrective Action Plan: 1) SCCHA plans to engage ap industry consultant to assess its internal processes and procedures concerning eligibility and tenant rent calculations, particularly focusing on the computation of adjusted annual income, to enhance accuracy and streamline the overall process. 2) The Compliance & Integrity Coordinator will examine the audited files and conduct individual meetings with each team member to discuss any identified errors, as well as to clarify the procedures and policies that contribute to the recurrence of these mistakes. The Compliance Officer, the employee, and the Program Director will sign the documentation, which will be added to the employee's file. 3) Monthly peer-to-peer audits will be conducted, accompanied by a staff meeting to collectively review identified errors. This approach aims to facilitate continuous training and encourages active participation from all staff members, enhancing their understanding of the errors. 4) SCCHA has strengthened its disciplinary measures to identify staff members who may lack the motivation or capability to meet the requirements of the role. If a staff member fails to maintain consistently successful audits of files for three consecutive months of 80% or above, a 90-day improvement plan will be initiated. Anticipated Completion Date: June 30, 2025 1. Within six months 2. On-going. 3. On-going. 4. On-going. Persons Responsible: Vera Jones, Executive Director Meisha Kerby, Director of Asset Management Suellen Riley-Keen, Program Integrity & Compliance Coordinator

Categories

Questioned Costs HUD Housing Programs Eligibility Material Weakness

Other Findings in this Audit

  • 516963 2024-001
    Significant Deficiency Repeat
  • 516964 2024-001
    Significant Deficiency Repeat
  • 1093404 2024-002
    Material Weakness
  • 1093405 2024-001
    Significant Deficiency Repeat
  • 1093406 2024-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $3.96M
14.872 Public Housing Capital Fund $3.42M
14.871 Section 8 Housing Choice Vouchers $427,775
14.182 Section 8 New Construction and Substantial Rehabilitation $130,196
14.896 Family Self-Sufficiency Program $67,171
10.427 Rural Rental Assistance Payments $60,095