Finding 544074 (2024-001)

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

AI Summary

  • Core Issue: The Authority failed to provide adequate income documentation for low-income families, leading to compliance issues with federal eligibility requirements.
  • Impacted Requirements: Compliance with eligibility criteria under the 1937 Housing Act was not met, affecting the accuracy of tenant rent calculations.
  • Recommended Follow-Up: The Reno Housing Authority should enhance monitoring controls to ensure accurate income reporting and obtain necessary third-party verification.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Moving to Work Demonstration Program Assistance Listing Number: 14.881 Federal Award Identification Number and Year: NV001VO - 2024 Award Period: July 1, 2023 – June 30, 2024 Compliance Requirement: Eligibility Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))). Condition: The Authority was unable to provide adequate income supporting documentation. Questioned costs: Unable to determine. Context: Exceptions were noted in 5 out of 40 files tested for eligibility requirements. For 2 of the 40 files tested for public housing eligibility, the tenants change in income was not updated in the HUD-50058. For 3 of 40 files tested for public housing eligibility, a portion of the tenant’s income was not supported by 3rd party documentation. Cause: The Authority did not sufficiently monitor controls to ensure compliance with eligibility requirements. Effect: The Authority is not in compliance with federal regulations regarding eligibility. Tenant rent may have been miscalculated due to using stale/inaccurate information in the rent calculation. Repeat Finding: No. Recommendation: We recommend that Reno Housing Authority reviews the controls in place to ensure that income entered into the HUD-50058 is accurate and supported through 3rd party verification.

Corrective Action Plan

Moving to Work Demonstration Program – Assistance Listing No. 14.881 Recommendation: We recommend that the Authority reviews the controls in place to ensure that income reported within the HUD-50058 is supported through 3rd party verification. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Since the audit findings were noted, the RHA immediately implemented a 3rd party approval process for all 50058 transactions. For 60 days, the Senior Property Manager and the Compliance Specialist will review all completed recertifications performed by Property Managers to ensure compliance with all HUD regulations prior to approving the 50058 in our software system. Upon approval, the Senior Property Manager or the Compliance Specialist will sign off on the recertification packet prior to it being scanned to the tenant’s file. If errors are found, the Property Manager will be advised to make the necessary corrections/changes. Once the corrections are made it will be resubmitted to the Senior Property Manager or Compliance Specialist for approval. After 60 days, an assessment of all errors noted will be completed to determine if there are consistent errors occurring which warrant additional training or if specific Property Managers require additional support with continued review of all recertifications. If a Property Manager’s work was free of errors after the initial 60 days, then a random selection of 25% of their work product will be reviewed monthly and signed off on the recertification packet prior to being scanned to the tenant’s file. The Asset Management Administrator or Director of Asset Management will pull a random selection of 10% of the approved recertifications that the Senior Property Manager and Compliance Specialist approved to also verify their accuracy in approving files. RHA is also sending all Property Managers through the Nan McKay HCV and Public Housing Rent Calculation training which will take place in person from February 18, 2025, through February 20, 2025. This will be at least the second time each Property Manager will complete this training since their hire date. Name(s) of the contact person(s) responsible for corrective action: Kristin Scott Planned completion date for corrective action plan: May 1, 2025 (ongoing for regular quality control efforts).

Categories

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

Other Findings in this Audit

  • 1120516 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.881 Moving to Work Demonstration Program $33.45M
14.195 Project-Based Rental Assistance (pbra) $28.27M
14.871 Section 8 Housing Choice Vouchers $1.38M
21.027 Coronavirus State and Local Fiscal Recovery Funds $950,000
14.870 Resident Opportunity and Supportive Services - Service Coordinators $131,222
32.008 Affordable Connectivity Program $10,097