Finding 575011 (2024-001)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2025-08-28

AI Summary

  • Core Issue: Seven out of twenty-five tenant files showed errors in income verification and late annual reexaminations.
  • Impacted Requirements: Compliance with federal regulations for accurate income calculations and timely inspections is essential for proper Housing Assistance Payment (HAP) subsidies.
  • Recommended Follow-Up: Implement a systematic review process for income calculations, enhance staff training, and ensure timely identification of reexaminations and inspections.

Finding Text

Finding 2024-001 – Housing Choice Voucher Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster – ALN 14.871 Condition & Cause: Our review of twenty-five (25) Housing Choice Voucher tenant files identified noncompliance in seven files examined. We noted the following discrepancies in our review: • Two (2) Instances of income verifications • Four (4) instances of a late annual reexamination • One (1) instance of an annual inspection not being done for a resident since 2020 The income discrepancies stemmed from incorrect manual calculation errors in addition to a missing student eligibility exemption. The remaining errors are related to the existing internal control structure being ineffective at identifying outstanding inspections or late annual reexaminations. Criteria: The Code of Federal Regulations and the Authority’s Administrative Plan require accurate income calculations for determining Housing Assistance Payment (HAP) subsidies. Correct income verification and calculation are essential for compliance with HUD guidelines and ensuring proper subsidy amounts. Effect: Inadequate verification of income and a failure to comply with housing standards can lead to inaccuracies in financial statements, incorrect HAP subsidy calculations, and noncompliance with Federal Housing Choice Voucher program requirements. Recommendation: We recommend that the Authority establish a systematic review process for income calculations to ensure accuracy. This process should incorporate comprehensive staff training in correct calculation methods and include regular quality control checks to promptly identify and correct errors. The Authority should also be able to identify upcoming annual reexaminations and annual inspections and treat them accordingly per their approved Administrative Plan. Questioned Costs: N/A Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Corrective Action Plan

Finding 2024-001 - Housing Choice Voucher Tenant Files - Eligibility- Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster - ALN 14.871 Corrective Plan: 1. Income Verification Vanette Greer (please state tenant in audit for privacy act) - Stated that she did not have one of her weekly check stubs due to being out with Covid. The Specialist processed the following: She totaled three (3) check stubs, then divided by 4 with one being at zero. She then annualized. Upon further review, it was determined that the YTD included an additional pay week (which she stated that she was out with Covid). An interim will be completed with a Retroactive Agreement offered. 2. Income Verification Lola Garrett (please state tenant in audit for privacy act) -A student credit was given but failed to acquire the necessary source document. No retro necessary. 3. Late Reexaminations (4). Four reexaminations were processed late due to insufficient information provided. The Executive Director approved the late reexams to preserve and grow the lease-up rate (at 86%} prior to HUD's declaration of insufficient funds (May 2025} for the remaining calendar year of 2025. 4. Inspections - We did have one inspection overlooked at an elderly site since 2020. The other tenants within the complex did receive inspections including SEMAP. We are now utilizing the PIC report going forward (instead of in-house system) to prevent such an oversight again. Person Responsible: Jeff Trahan, Executive Director Anticipated Completion Date: July 14, 2025 Note: It is the Auditee's position that such an oversight constitutes a "deficiency" (oversight flaw) rather than a Significant Deficiency leading to a Material Weakness in Internal Control.

Categories

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

Other Findings in this Audit

  • 1151453 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $3.49M
14.850 Public Housing Operating Fund $1.21M
14.872 Public Housing Capital Fund $520,134