Finding Text
Finding 2024-002: Lower Income Housing Assistance Program - Section 8 New Construction and
Substantial Rehabilitation
Assistance Listing Number: 14.182
U.S. Department of Housing and Urban Development
(Repeat of Finding 2023-002 and 2022-002)
Compliance Requirements: Cash Management, Eligibility, Reporting, Special Tests and Provisions
Type of finding: Internal Control Over Compliance (significant deficiency)
Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award (2 CFR 200.303(a)).
Condition: The Organization has not implemented a review or monitoring process to ensure propriety in eligibility determinations, tenant lease agreements, housing assistance payment requests, and return of funds for vacant units and rent adjustments to contract rent included on the monthly Housing Assistance Payment vouchers.
Cause: The compliance responsibilities of the Organization are performed by one person which has made it difficult to establish a proper review process over cash management, eligibility, reporting, and special tests and
provisions requirements.
Effect: Noncompliance with the Lower Income Housing Assistance Program - Section 8 New Construction and Substantial Rehabilitation requirements may exist and not be detected by the Organization.
Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of administrative staff allowing the administrator to act in a more supervisory position.
Grantee’s Response: See corrective action plan.