Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers - Mainstream Vouchers Federal Catalog Numbers: 14.871 and 14.879 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility. Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,313 units. Of a sample size of forty-five (45) tenant files, the following was noted: HUD form 9886 was missing in 1 file Verification of income was missing in 2 files Verification of assets was missing in 1 files HUD 50058 annual recertification was missing in 4 files Original Application was missing in 5 files Our sample size is statistically valid. Known Questioned Costs: $215,596. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs are in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority agrees with the findings that some tenant file documents were essentially unavailable for examination at the time of the audit and that a system of consistent document filing, and regular file reviews are necessary. The ?missing? documents were subsequently found but in various electronic locations, thereby making them not easily accessible to the auditors. There were also timing issues, in that a recertification was begun in 2022 but not completed or made effective until 2023 once all documents had been received. The tenant documents will now be filed in one place, in Yardi as attachments to the Family Detail Info (FDI) screen in the proper subfolder depending upon subject (e.g. Assets, Income, Member). The Authority is working to create and label the subfolders needed for this purpose. The contractor and internal staff will receive detailed instructions on how to file all documents, from the receipt of documents from the tenant to the commemoration of the transaction in a HUD Form 50058. All will be required to sign a confirmation they received such instructions. All new staff responsible for collecting documents, processing transactions and creating 50058s will obtain training in the correct system of filing such documents as part of their on-boarding packet of trainings. The Authority will institute a quality control procedure for the regular review of random sample files at least quarterly to ensure that the filing system is being followed and the documents are complete and readily found.