Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Housing Voucher Cluster
Assistance Listing Number: 14.871/14.879/14.EHV
Federal Award Identification Number and Year: VA901; 2023-2024
Award Period: July 1, 2023 through June 30, 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters
Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination
of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form
for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, Special Tests and Provisions Selection from the Waiting List) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516).
Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files:
- 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058.
- 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058.
- 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058.
- 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation.
- 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18.
- 1 of 60 files selected did not include the completed housing specialist checklist.
The samples were statistically valid samples.
Questioned costs: $12,622
Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with
federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team.
Effect: The Authority is not in compliance with HUD requirements.
Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files.
Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification.
Views of responsible officials: There is no disagreement with the audit finding.