Finding 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers and Emergency Housing Vouchers Programs
Assistance Listing Number: 14.871, 14.879 and 14.EHV Noncompliance - E. Eligibility - Tenant Files
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Eligibility
Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority's files and on discussion with management, there were documents that were unavailable for examination at the time of audit.
Context: There are approximately 9,051 units. Of a sample size of eighty-nine (89) tenant files, the following was noted:
• HUD-9886 Authorization for Release of lnformation was missing in 4 files Our sample size is statistically valid.
Known Questioned Costs: $24,363
Cause: There is significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. 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 Housing Voucher Cluster is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files.
Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.
Views of responsible officials and planned corrective action:
Of the Eighty Nine (89) tenant files audited, four (4) tenant files contained a deficiency in the same indicator---the Authorization for the Release of lnformation/ Privacy Act Notice (HUD Form 9886) retained in the tenant file was executed after the audit date range, not within the audit period (4/1/23- 3/31/24) or within the three months prior.
The HACCC discovered two contributing factors for this deficiency and identified a plan to ensure compliance with this requirement which is detailed below.
First, the HACCC's Housing Choice Voucher program entered into a partnership with Paul Edwards Management and Consulting (PEM) on May 1st 2024. This partnership provides the HACCC's Housing Choice Voucher program with technical assistance and coverage of vacant positions within the Housing Choice Voucher program Continued Eligibility team. The PEM team members assigned to Continued Eligibility are responsible for completing timely Annual Recertifications for all assigned Housing Choice Voucher program participants---including the collection of any signature documents required by HUD annually. To ensure compliance with this requirement, contract performance indicators related to those positions temporarily assigned to PEM (including the timeliness of Annual Recertifications and a consolidated report of findings within the Electronic File Protocol Quality Control Audit Checklists) will be included in a corrective action plan. The enhanced monitoring provided by the corrective action plan will a) ensure the continued collection of the performance indicator data and b) provide timely feedback regarding the partnerships ability to mediate the deficiency.
Second, HUD removed the expiration date from the 9886 form. Effective 01/01/2024, HUD requires Housing Authorities to collect a signature on the 9886 form once throughout the course of participation instead of requiring Housing Authorities to collect a signature on the form annually (or every 15 months). HUD issued PIH Notice 2023-27 on 09/29/2023. The notice indicated "In accordance with the final rule, all applicants must sign the consent form at admission, and participants must sign the consent form no later than their next interim or regularly scheduled income reexamination. After an applicant or participant has signed and submitted a consent form either on or after January 1, 2024 (regardless of the PHA/MFH Owner's compliance date), they do not need to sign and submit subsequent consent forms at the next interim or regularly scheduled income examination ... ".
The HACCC' s Housing Choice Voucher program began to request tenant signatures on the updated 9886 form effective 1/1/2024 (within our online recertification workflows) and effective 3/29/24 (within our paper recertification packets). Internal procedures for the storage of electronic documents ("HACCC Electronic File Protocol") related to the 9886 form were updated in accordance with the change, to in effect, retain the 9886 document as any other "vital document" or one-time verification would be stored and retained (ex. birth certificate, social security card, etc)--- storing and retaining only the most recent version of the document.
The HACCC agrees that the requirement to retain a 9886 executed within the audit date range for these 4 files was not fulfilled despite the above-mentioned updates taking place within the audit date range. To ensure compliance with this requirement, Electronic File Protocol QC Checklist Procedure Training will be included in a corrective action plan. The training requirement will a) ensure the continued collection
and review of the Electronic File Protocol Quality Control reports and b) provide timely feedback regarding whether having a single retention requirement applied throughout an entire fiscal year will effectively mediate this deficiency.
We agree with the Auditor's observations on the inspection of the tenant files and will implement internal control procedures that will ensure compliance of federal regulations. Ingrid Layne, Director of Assisted Housing, will be responsible to implement this corrective action by March 31, 2025.