Finding Text
2023-001: Eligibility, Special Tests and Provisions (Reasonable Rent, Housing Assistance Payment)
– Significant Deficiency in Internal Controls over Compliance over Maintenance of Tenant Files
ALN and Title: 14.871 Section 8 Housing Choice Vouchers
Federal Agency: U.S. Department of Housing and Urban Development
Award Year: 2023
Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish
and maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Title 24 US Code of Federal Regulations Part 982 Subpart K requires housing authorities operating a
Section 8 program to examine and re-examine tenant eligibility regularly, ensure that rent paid under
the Section 8 program meets the definition of “reasonable rent” as defined by HUD, and requires certain
documentation to be maintained related to tenant rent and Housing Assistance Payments.
Condition: The Authority does not have effective controls over this compliance requirement, which
resulted in the following during our review of tenant files:
For one of the 49 tenant files tested, the Application had not been signed by the applicant.
For one of the 49 tenant files tested, the file did not contain a copy of the Rent Reasonable
Valuation form.
For one of the 49 tenant files tested, the HAP contract was not signed off as reviewed by the
Housing Specialist.
Cause: The Authority did not have controls in place to help follow the appropriate procedures in
accordance with procedures to ensure compliance.
Effect: The Authority may unintentionally approve a tenant who is not eligible which could lead to
questioned costs and/or repayment of funds to the Grantor agency.
Questioned Costs: None noted. Auditors’ Recommendation: The Auditors recommend that the Authority strengthen its controls over
tenant file documentation to ensure proper signoffs, forms, and data entry are present.
Views of Responsible Officials: The Housing Authority does have controls in place, we have file
checklists to be followed by the staff, but unfortunately, staff errors do occur. These items have been
addressed with staff.
Estimated Completion Date: September 30, 2023 Responsible Party: Executive Director