Finding 5735 (2023-001)

Significant Deficiency
Requirement
E
Questioned Costs
$1
Year
2023
Accepted
2023-12-20
Audit: 7804
Organization: Somerville Housing Authority (MA)

AI Summary

  • Core Issue: 10.8% of Housing Choice Voucher tenant files reviewed were noncompliant, with missing documentation and outdated income verification.
  • Impacted Requirements: Noncompliance with federal regulations and the Authority’s Administrative Plan regarding tenant file documentation.
  • Recommended Follow-Up: Conduct a file audit of existing tenants and implement a quality control review to ensure compliance with documentation requirements.

Finding Text

Finding 2023-001 – Housing Choice Voucher Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster – ALNs #14.871 and #14.879 Condition & Cause: We reviewed sixty-five (65) Housing Choice Voucher tenant files and noted seven (7) files not in compliance, or 10.8%. For three (3) of the files, we noted that the reexaminations in review were not maintained with the tenant documentation. Upon further inquiry, the Authority was unable to provide the documentation for the missing actions. The HAP paid during the fiscal year from the three (3) undocumented actions is the basis for the questioned costs. For the remaining four (4) files, we noted that the verification of income was either missing or outdated. We noted that the Authority experienced high staff turnover and has had difficulty in hiring and retaining employees. As of August 2023, subsequent to year-end, the Authority has contracted with an outside vendor to assist with tenant certifications. Criteria: The Code of Federal Regulations, the Authority’s Administrative Plan, and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Improper verification and documentation of tenant reexaminations can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine the extent of the deficiencies. We also recommend that the Authority implement a quality control review to adequately monitor compliance with regulations pertaining to the maintenance of tenant files. Questioned Costs: $46,655 Repeat Finding: No Was sampling statistically valid? Yes

Corrective Action Plan

Finding 2023-001 – Housing Choice Voucher Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster – ALNs 14.871 and 14.879 Corrective Action Plan: Finding: Somerville Housing Authority (SHA) received the authority’s Single Audit for the year ended March 31, 2023, indicating that SHA received a finding of Significant Deficiencies identified not considered to be material weaknesses. Auditors noted three files missing documentation of the action, as well as four missing income verification or outdated income verification. Auditors recommend that SHA conduct a file audit to determine the extent of deficiencies. They also recommend that SHA implement a quality control review to monitor the maintenance of tenant files. PHA Response: The SHA has implemented a corrective action plan to address noted deficiencies. The SHA has had significant staffing turnover in the last year. As a result, until all vacant positions are filled, the SHA has contracted with Nan McKay Associates (NMA) to complete all Annual Recertifications. NMA has assigned four full-time staff to complete all recertifications and has assigned one additional full-time staff person to conduct a monthly Qualify Control Review of all recertifications completed by NMA. During NMA’s contract, SHA has focused on refilling positions and training new staff. SHA has hired a new Director of Leased Housing, a new Leased Housing Supervisor, and one Leasing Coordinator. Two additional Leasing Coordinator positions are still vacant, and interviews are ongoing. SHA plans to hire two more staffers for that role. The Director and Supervisor have been providing one-on-one training and support to all new staff in addition to enrollment in training opportunities provided by outside vendors. At weekly staff meetings, the Director reviews Administrative Plan policies, and corrections needed for any quality control issues found before they become systemic. Besides the Nan McKay monthly quality control review, the SHA has begun conducting internal quality control audits every month for SEMAP. Additionally, SHA has implemented an electronic file storage system, utilizing PHA Web’s online system to better organize, track, and maintain client files. PHA Goal: Based on the SHA’s monthly quality control sample of tenant files: (A) The SHA obtains third party verification of reported family annual income, the value of assets totaling more than $5,000, expenses related to deductions from annual income, and other factors that affect the determination of adjusted income, and uses the verified information in determining adjusted income, and/or documents tenant files to show why third party verification was not available; (B) The SHA properly attributes and calculates allowances for any medical, child care, and/or disability assistance expenses; and (C) The SHA uses the appropriate utility allowances to determine gross rent for the unit leased, (D) The SHA applies the appropriate payment standard in accordance with 24 CFR 982.505. PHA Strategies: Target completion date 1) The SHA will review its current quality control tracking system to record the results of random sampling of files as required in 985.2. The SHA will revise this system on an ongoing basis if necessary. 12/31/2023 2) Confirm that 90% or more files sampled contain proper third party written verification (or equivalent) of income and assets, proper calculation of appropriate deductions and allowances and that appropriate utility allowance were used in the calculation of tenant rent. 80% 12/31/2023 Person Responsible: Matt Lincoln, Director of Leased Housing David Hospedales, Leased Housing Supervisor Anticipated Completion Date: The SHA anticipates completing all hiring and training of new Leased Housing staff no later than 04/01/2024.

Categories

Questioned Costs HUD Housing Programs Eligibility Significant Deficiency Special Tests & Provisions

Other Findings in this Audit

  • 5736 2023-001
    Significant Deficiency
  • 582177 2023-001
    Significant Deficiency
  • 582178 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $24.33M
14.182 Section 8 New Construction and Substantial Rehabilitation $3.06M
14.850 Public and Indian Housing $2.57M
14.879 Mainstream Vouchers $2.03M
14.872 Public Housing Capital Fund $1.43M
14.896 Family Self-Sufficiency Program $143,991
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $128,340
14.870 Resident Opportunity and Supportive Services - Service Coordinators $79,200