Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant?s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, ?Special Tests and Provisions ? Public Housing Waiting List?) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements. Questioned Costs: Unable to determine, projected over $25,000 Context: During our testing of a sample of 40 tenant files, it was noted that 16 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 7 instances where the income reported on the 50058 were not supported within the tenant file. ? 4 instances where the expenses reported on the 50058 were not supported within the tenant file. ? 8 instances where the authority failed to calculate the correct HAP/TAP ? 9 instances where the housing authority did not review the family income, assets and expenses on the annual basis. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of the rent and verification of the tenants income. Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants are met. Views of Responsible Officials: There is no disagreement with the audit finding.