Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program
Federal Assistance Listing Numbers: 14.850
Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy.
Context: Two (2) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that one (1) out of two (2) new move-ins selected could not be traced with any certainty back to the Authority's waiting list.
Known Questioned Costs: $3,320
Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list as proper documentation for new admissions was not maintained. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Public and Indian Housing Program is in material non-compliance with the special tests and provisions type of compliance related to selections from the waiting list, as new admissions to the program could be admitted in violation of HUD roles and the Authority’s Admissions and Continued Occupancy Policy.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. View of Responsible Officials and Corrective Actions: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures that will ensure compliance with federal regulations. Rhodney Norman, Interim CEO, will be responsible to implement this corrective action by March 31, 2025.