FAC Explorer

Finding 575246 (2024-002)

-
Requirement
E
Questioned Costs
-
Year
2024
Accepted
2025-08-29
Audit: 365307
Organization: Housing Authority of the City of Los Angeles (CA)
Auditor: Berman Hopkins Wright & Laham CPAS and Associates

AI Summary

  • Core Issue: The Housing Authority has compliance gaps in tenant file management, including late recertifications and missing documentation.
  • Impacted Requirements: Non-compliance with HUD regulations (24 CFR 960.259 and 5.705) regarding timely recertifications and unit inspections.
  • Recommended Follow-up: Review and enhance internal controls, correct identified deficiencies, and assess the impact on the entire tenant population.

Finding Text

Condition: Out of a population of approximately 6,000 tenants for the Public Housing program, 41 tenant files were tested and the following exceptions were noted: • 2 files had late recertification performed of which 1 missed getting an annual recertification in 2024; • 1 file was missing 214 form documentation for household members; • 1 file had a missing valid 9886 form; and • 1 file did not have support of an inspection being performed during the year. Context: The auditor haphazardly selected 41 tenant files out of the population, which we consider to be a statistically valid sample size. The auditor reviewed the tenant files and supporting documentation to ensure proper procedures are being followed and that the Housing Authority is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Criteria: The Authority’s ACOP and 24 CFR 960.259 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. In addition, 24 CFR 5.705 requires each unit be periodically inspected. Cause: The Housing Authority experienced staffing and operational challenges during the year and did not have the available staff to follow the established internal controls to ensure proper compliance with regards to timely recertifications and collection of required HUD documentation to verify eligibility. Additionally, a few of the exceptions might have been caused by oversight or misfiling of documents. Effect: The Housing Authority is not in full compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: Unknown. Auditor’s Recommendations: The Housing Authority should reevaluate their established procedures and controls in place to ensure full compliance in regards to recertifications. The Housing Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. View of Responsible Officials: See Corrective Action Plan.

Corrective Action Plan

Management Response and Corrective Action: HACLA's Housing Services Department appreciates the work taken to review these files and to point out areas of improvement. While Housing Services regularly trains staff on the importance of reviews being conducted on time as well as accurately and requires Assistant Managers to Quality Control 100% of annual reviews prior to being approved for transmission, mistakes do still occur - whether it be from oversight or misfiling of documents. Additionally, the auditor noted staffing as an issue. At Jordan Downs which has been under transition, there has been staffing challenges as the occupied units decrease and residents are transitioned to new units. HACLA will ensure that the Assistant Manager continues to Quality Control 100% of the annual reviews prior to transmission. We will continue to reiterate the importance of these issues during our Annual Occupancy training as well as during bi-monthly Manager and Assistant Manager meetings and will continue to conduct any necessary and ad-hoc trainings throughout the year as issues are identified. Housing Services performs a bi-yearly audit of 10% of tenant files and the staff person conducting this audit meets with each site staff to review the errors found so that that staff know where they need to improve. As this internal audit was just completed in June, the cumulative results are being compiled and will be reviewed with all occupancy staff in a training that we are aiming to conduct in late October/early November 2025. These results will also be reviewed at the next Manager and Assistant Manager meeting. HACLA's Asset Management Department oversees the performance of the 3rd party property management companies. Although all HACLA staff and the 3rd party property managers have been trained on the public housing program requirements, Asset Management will implement an annual training to reinforce the key elements of the program requirements. Additionally, during our routine annual compliance monitoring, we will expand our file audits to 20% of the tenant files. All current year's audit observations will be reviewed with the Asset Management compliance team and our property managers, and a program training will be conducted by the end of October/early November 2025. Person Responsible: Director of Housing Services

Categories

HUD Housing Programs Eligibility Internal Control / Segregation of Duties

Other Findings in this Audit

  • 575243 2024-001
    Significant Deficiency
  • 575244 2024-001
    Significant Deficiency
  • 575245 2024-001
    Significant Deficiency
  • 1151685 2024-001
    Significant Deficiency
  • 1151686 2024-001
    Significant Deficiency
  • 1151687 2024-001
    Significant Deficiency
  • 1151688 2024-002
    -

Programs in Audit

ALN Program Name Expenditures
14.195 Section 8 Housing Assistance Payments Program $1.03B
14.871 Section 8 Housing Choice Vouchers $72.30M
14.267 Continuum of Care Program $52.91M
21.019 Coronavirus Relief Fund $34.60M
14.872 Public Housing Capital Fund $32.70M
14.850 Public and Indian Housing $25.80M
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $5.98M
14.889 Choice Neighborhoods Implementation Grants $4.50M
14.879 Mainstream Vouchers $2.86M
14.241 Housing Opportunities for Persons with Aids $2.19M
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $2.02M
14.888 Lead-Based Paint Capital Fund Program $1.11M
14.896 Family Self-Sufficiency Program $1.04M
93.310 Trans-Nih Research Support $395,957
14.191 Multifamily Housing Service Coordinators $357,886
14.895 Community Project Funding $353,485
17.258 Wioa Adult Program $335,822
10.727 Inflation Reduction Act Urban & Community Forestry Program $237,536
21.027 Coronavirus State and Local Fiscal Recovery Funds $226,725
14.892 Choice Neighborhoods Planning Grants $166,901
17.278 Wioa Dislocated Worker Formula Grants $128,335
14.870 Resident Opportunity and Supportive Services - Service Coordinators $73,671
14.218 Community Development Block Grants/entitlement Grants $46,000
66.312 Environmental Justice Government-to-Government (ejg2g) Program $27,848
32.011 Affordable Connectivity Outreach Grant Program $17,780
93.558 Temporary Assistance for Needy Families $4,096