Finding 578974 (2023-002)

Finding 2023-002 –Low Income Public Housing Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Material Weakness – Low Income Public Housing – Subsidy ALN #14.850 Condition & Cause: Our review of fifty-five (55) Low Income Public Housing tenant files revealed a total of sixteen (16) files in error, which equates to roughly twenty-nine percent. Of these, we noted twelve income verification errors, one failure to collect third-party full-time student status, one file in which the annual recertification was updated in PIC without tenant paperwork, and two instances in which the applicable action could not be located. The primary cause for the income verification errors was failure to gather third-party verification for self-certified income. We noted that tenants are signing affidavits stating where they receive assistance, and the Authority is taking this affidavit with no additional verification. We found that the Authority has had difficulty gathering documentation from its tenants during the post-COVID period. When the Authority was unable to gather documentation in a timely manner, they would process annual actions with prior year information and increase the tenants’ rent to the flat rent, which is not a procedure outlined in the Housing Authority’s ACOP. This led to the tenants’ inability to meet the rental burden placed on them. However, as described in Finding 2023-001, tenants were not being evicted on a timely basis, leading to tenants accumulating extremely high Tenant Accounts Receivable balances. Criteria: The Code of Federal Regulations, the Housing Authority’s Admissions and Continued Occupancy Policy, and specific HUD guidelines in documenting and maintaining the Low-Income Public Housing tenant files. Recommendation: We recommend that the Authority conduct a thorough internal audit of the Low-Income Public Housing tenant files to determine the number of tenants who are noncompliant with their dwelling lease and/or the Admissions and Continued Occupancy Policy. The Authority should move forward with eviction proceedings for tenants unwilling to become compliant and negotiate repayment agreements for tenants who are willing. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.