Finding 5766 (2023-003)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-12-20

AI Summary

  • Core Issue: Management is not calculating rent reasonableness for new tenants in the Choice Voucher Program.
  • Impacted Requirements: This violates HUD requirements for rent reasonableness calculations, potentially leading to unreasonable rent payments.
  • Recommended Follow-Up: Management should establish a process for performing these calculations and ensure documentation is retained.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Choice Voucher Program Federal Assistance Listing Number: 14.871 Pass-Through Agencies: Faribault and Le Sueur County Housing and Redevelopment Authorities Pass-Through Number(s): MN200VO/MN171VO Award Period: 3/1/21-3/31/23 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Housing Choice Voucher program requires rent reasonableness calculations to be performed for each new contract. Condition: Management does not perform rent reasonableness calculations on new tenants. Questioned Costs: None Context: During testing, zero of five tenants selected had documentation of rent reasonableness calculations performed. Cause: Management does not have a process in place to calculate reasonable rent upon admission of new tenants to the program. Effect: Rent to owner could be unreasonable and noncompliant with the Organization’s Administrative Plan and HUD requirements. Repeat Finding: No Recommendation: We recommend that management implements a process to perform rent reasonableness calculation and retain documentation. Views of responsible officials and planned corrective actions: Management is in agreement with the finding.

Corrective Action Plan

2023-003 Special Tests and Provisions Recommendation: We recommend that management implements a process to perform rent reasonableness calculation and retain documentation. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action planned/taken in response to finding: We are using Housing Data Systems (HDS) as a tenant management solution. This software will track the reasonableness of rent and produce the appropriate documentation. The Program Coordinator will use checklists and the HDS to ensure that we collect the appropriate documents which we will store in Laserfiche. The Housing Director will review a minimum random sampling of 25% of the documentation for completeness throughout the year. If the Housing Director discovers significant issues with the documentation, they will review all the paperwork and retrain the Program Coordinator, so the documentation meets performance standards. Name of the contact person responsible for corrective action: Amanda Mackie Planned completion date for corrective action plan: The HDS system is currently being utilized. The documentation review will begin on 10.31.2023 and continue indefinitely.

Categories

HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 5765 2023-002
    Material Weakness
  • 5767 2023-004
    Material Weakness
  • 5768 2023-005
    Material Weakness
  • 5769 2023-002
    Material Weakness
  • 5770 2023-003
    Material Weakness
  • 5771 2023-004
    Material Weakness
  • 5772 2023-005
    Material Weakness
  • 5773 2023-001
    Significant Deficiency
  • 5774 2023-001
    Significant Deficiency
  • 5775 2023-001
    Significant Deficiency
  • 5776 2023-001
    Significant Deficiency
  • 5777 2023-006
    Significant Deficiency
  • 5778 2023-006
    Significant Deficiency
  • 5779 2023-006
    Significant Deficiency
  • 5780 2023-006
    Significant Deficiency
  • 5781 2023-001
    Significant Deficiency
  • 5782 2023-001
    Significant Deficiency
  • 5783 2023-001
    Significant Deficiency
  • 582207 2023-002
    Material Weakness
  • 582208 2023-003
    Material Weakness
  • 582209 2023-004
    Material Weakness
  • 582210 2023-005
    Material Weakness
  • 582211 2023-002
    Material Weakness
  • 582212 2023-003
    Material Weakness
  • 582213 2023-004
    Material Weakness
  • 582214 2023-005
    Material Weakness
  • 582215 2023-001
    Significant Deficiency
  • 582216 2023-001
    Significant Deficiency
  • 582217 2023-001
    Significant Deficiency
  • 582218 2023-001
    Significant Deficiency
  • 582219 2023-006
    Significant Deficiency
  • 582220 2023-006
    Significant Deficiency
  • 582221 2023-006
    Significant Deficiency
  • 582222 2023-006
    Significant Deficiency
  • 582223 2023-001
    Significant Deficiency
  • 582224 2023-001
    Significant Deficiency
  • 582225 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $586,527
93.568 Low-Income Home Energy Assistance $502,969
21.027 Coronavirus State and Local Fiscal Recovery Funds $486,094
93.600 Head Start $447,410
93.569 Community Services Block Grant $348,163
17.258 Wia Adult Program $308,373
81.042 Weatherization Assistance for Low-Income Persons $300,495
17.235 Senior Community Service Employment Program $246,897
10.558 Child and Adult Care Food Program $182,969
17.278 Wia Dislocated Worker Formula Grants $98,944
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $65,963
14.267 Continuum of Care Program $59,151
17.259 Wia Youth Activities $30,697
93.558 Temporary Assistance for Needy Families $29,472
17.277 Workforce Investment Act (wia) National Emergency Grants $13,647
17.285 Apprenticeship USA Grants $7,316
21.009 Volunteer Income Tax Assistance (vita) Matching Grant Program $5,902
10.551 Supplemental Nutrition Assistance Program $2,832