Finding 569694 (2024-004)

2024-004 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: HUD-50058, Family Report (OMB No. 2577-0083) – The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Additionally, HUD requires PHAs to accurately report financial and leasing data in the Voucher Management System (VMS) and ensure that this data reconciles with the Financial Data Schedule (FDS). Proper reconciliation between these reports is necessary for accurate financial reporting and compliance with HUD funding requirements. During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058’s into the PIC system for 6 out of 40 files tested. Additionally, the Authority did not properly reconcile the Voucher Management System (VMS) report to the Financial Data Schedule (FDS). Discrepancies were noted between the two reports, indicating a lack of proper reconciliation procedures. These inconsistencies could lead to inaccurate financial reporting and potential noncompliance with HUD requirements. The differences may be due to errors in data entry, timing issues, or misclassification of financial transactions. Amount of Questioned Costs: None Context: During testing of a sample of 40 HUD-50058 forms, it was noted that 6 forms were not accurately prepared. • 1 HUD-50058 form incorrectly calculated the amount of assistance received as child support payments were not included in income. • 5 HUD-50058 forms reported the incorrect utility allowance amount. The VMS data collection report contained several material variances from the unaudited FDS submission. Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system. Additionally, the Authority lacked a structured reconciliation process between the VMS report and the FDS, leading to reporting discrepancies. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially affect the determination of HAP funding. Furthermore, the failure to reconcile the VMS report to the FDS could result in financial misstatements and impact funding calculations. Auditor’s Recommendation: We recommend that the Authority performs quality control reviews on the 50058 submissions to ensure timely and accurate reporting. Additionally, the Authority should implement a reconciliation process to ensure that the financial data reported in the VMS aligns with the FDS. This process should include periodic reviews, detailed variance analysis, and appropriate documentation to support reported amounts. Staff should receive training on proper reconciliation techniques and HUD reporting requirements to prevent future discrepancies. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendation