Finding Text
Finding 2024-002 – Low Income Public Housing Tenant Files – Eligibility – Noncompliance & Material Weakness – Public and Indian Housing – ALN #14.850
Criteria:
The Code of Federal regulations, the Housing Authority Admissions and Continued Occupancy Policy and specific HUD guidelines for the Low Income Public Housing program.
Condition & Cause:
We reviewed seventy-six (76) tenant files from the Low Income Public Housing program for various compliance indicators. We found that seven (7) files, or about 9% of the sample, were noncompliant for income-related reasons. Specifically, two (2) files had income miscalculations that did not materially affect the tenants, and five (5) files relied on tenant self-declaration without documenting attempts to gather the preferred third-party verification.
We also found that the Authority did not conduct the required annual self-inspections of public housing units during the fiscal year, as mandated by 24 CFR 5.707. Inspections were performed in August 2024, subsequent to fiscal year end and 18 months following the previous inspections. This is consistent with the Authority's low scores on the NSPIRE inspections, which were also conducted subsequent to fiscal year end.
We noted that the Agency underwent extensive changes in management during the current fiscal year ended June 30, 2024, which resulted in several staff vacancies, which contributed to the noncompliance.
Effect:
Improper calculation and verification of annual income can result in inaccurate subsidy amounts, financial burdens on participants, and misstatements in the Authority’s financial statements. Delayed unit inspections increase the risk of unsafe or unsanitary living conditions. These issues lead to noncompliance with regulations and heightened scrutiny from oversight bodies.
Recommendation:
We recommend that the Agency conduct an audit of existing tenants to determine the extent of noncompliance regarding income calculation and verification. Additionally, the Agency should ensure that units are inspected at least annually.
Questioned Costs: None
Repeat Finding: No
Was sampling statistically valid? Yes