Finding 541969 (2024-002)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2025-03-31

AI Summary

  • Core Issue: There are significant deficiencies in internal controls regarding tenant eligibility files, with 8 out of 44 tested files showing errors.
  • Impacted Requirements: Compliance with the Authority’s ACOP and HUD regulations is lacking, risking incorrect rental assistance amounts.
  • Recommended Follow-Up: Address the identified deficiencies, review all tenant files for similar issues, and implement quality control procedures for ongoing compliance monitoring.

Finding Text

2024-002 Eligibility Public and Indian Housing Significant deficiency in internal control Other Matter to be Reported Under the Uniform Guidance Condition: Out of a total tenant population of approximately 430 for Public and Indian Housing, 44 tenant files were tested and 8 files had the following deficiencies: • Six files had incorrect or missing flat rent option sheets; • One file was missing a custody information; and • One file had incorrect income calculation. Criteria: The Authority’s ACOP and 24 CFR 960.257 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding complete and accurate tenant files for all public housing sites. Context: The auditor randomly selected 44 tenants out of the population, which we consider to be a statistically valid sample size, for testing tenant files for eligibility. The auditor reviewed the tenant file and support to ensure controls over compliance were operating effectively. Cause: Public housing sites do not have adequate systems and controls in place to ensure all of the eligibility requirements are being followed. Effect: The Authority is not in full compliance with all of the HUD requirements regarding eligibility and tenant recertification which could result in incorrect amount of rental assistance being provided. Questioned Costs: Unknown Auditor Recommendations: The Authority should correct the deficiencies noted in the tested files and perform reviews of the remaining universe, for consideration of similar errors. In addition, the Authority should establish quality control review procedures to ensure proper monitoring of compliance with the requirements related to tenant eligibility. Management Response: See the Corrective Action Plan in this report.

Corrective Action Plan

2024-002 Eligibility Public and Indian Housing Significant deficiency in internal control Other Matter to be Reported Under the Uniform Guidance Condition: Out of a total tenant population of approximately 430 for Public and Indian Housing, 44 tenant files were tested and 8 files had the following deficiencies: • Six files had incorrect or missing flat rent option sheets ; • One file was missing a custody information; and • One file had incorrect income calculation. Auditor Recommendations: The Authority should correct the deficiencies noted in the tested files and perform reviews of the remaining universe, for consideration of similar errors. In addition, the Authority should establish quality control review procedures to ensure proper monitoring of compliance with the requirements related to tenant eligibility. Action Taken: Updates were made to the flat rent option sheet and they have been placed in all files. The missing custody information has been obtained and placed in the folder. GHA will continue to provide training and guidance to all staff to ensure that all transactions are implemented correctly, including income calculation standard, and to ensure that all necessary documentation is placed in the participant's files. Name(s} of the contact person(s) responsible for corrective action: Odelia Williams, Director of Public Housing Planned completion date for corrective action plan: GHA staff completed the corrections and has been reminded to double check their work to avoid human error. Additionally, all training will be completed by August 2025.

Categories

HUD Housing Programs Subrecipient Monitoring Eligibility Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 541970 2024-001
    Significant Deficiency Repeat
  • 1118411 2024-002
    Significant Deficiency
  • 1118412 2024-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $22.80M
14.871 Section 8 Housing Choice Vouchers $21.82M
14.850 Public Housing Operating Fund $1.75M
14.872 Public Housing Capital Fund $1.45M
14.896 Family Self-Sufficiency Program $96,132