Finding Text
Finding Reference: 2024-002
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Number: 14.871 and 14.879
Federal Grant Number: Not Applicable
Category of Finding: Eligibility
Classification of Finding: Material Weakness in Internal Control over Compliance
Material Noncompliance
Criteria
Pursuant to 24 CFR 982.516, the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third party verification. As a condition of admission to or continued assistance, the Authority shall require the tenant and other family members to provide necessary information, documentation, and execute a HUD-approved release and consent form authorizing the Authority to verify income eligibility. For both family and income examinations and reanimations, the Authority must obtain and document in the tenant 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 982.516 also requires the Authority to establish procedures that are appropriate and necessary to assure that income data provided by application or participant families is complete and accurate.
Condition
From a total population of 16,907 tenants under the Housing Choice Voucher cluster for the fiscal year ended September 30, 2024, we selected a statistically valid sample of one monthly subsidy payment within the fiscal year ended September 30, 2024 for each of 60 selected tenants. For fifteen of the tenants examined, the Authority was not able to provide documentation demonstrating that a reexamination was completed within the required time frame prior to the tested monthly subsidy payment.
Cause of Condition
The Authority’s internal control procedures were not sufficient to ensure that all relevant tenant records and documents are properly completed and filed with within the specified due dates for annual reexamination.
Effect
The Authority is not in compliance with HUD requirements regarding annual re-examination of family income and composition, which may result in inaccurate assistance provided to participants.
Questioned Costs
The Authority was able to provide documentation demonstrating that reexaminations were completed subsequent to the tested subsidy payments. Therefore, there were no questioned costs identified in connection with the tenants examined.
Identification of Repeat Finding
This is not a repeat finding in the immediate prior audit period.
Recommendation
The Authority should ensure that it has procedures in place to track and complete future tenant reexaminations within the required time frames.
View of Responsible Officials and Planned Corrective Action
See separately prepared Corrective Action Plan.