Finding Text
Finding 2022-003 ? Information on the federal program: CFDA 14.850; U.S Department of Housing and Urban Development; Public and Indian Housing; annual contributions contract number FW-7097; fiscal year ending March 31, 2022. ? Criteria or specific requirement (including statutory, regulatory, or other citation): Eligibility requirements in accordance with 24 CFR 960 relating to admission to, and occupancy of, public housing. ? Condition: The audit identified exceptions in tenant file exams relating to waiting list, rent choice, utility allowances and flat rate rent requirements. ? Questioned costs: My sample projected error was $85,031 due to incorrect calculation of flat rate rent amounts, in relation to the entire population. ? Context: The audit identified 4 rent calculation errors, 3 waiting list exceptions, and 4 rent choice requirement exceptions from my sample of 24 tenants reviewed. Also, the utility allowance and flat rate rent schedules have not been properly updated. ? Effect: The errors noted were due to missing documentation, out of date utility allowances and flat rate rents. The potential misstatement is considered to be material to the financial statements. ? Cause: Weakness in internal controls over tenant?s annual certifications relating to proper documentation and calculation of rent. ? Identification as a repeat finding: This is not a repeat audit finding. ? Recommendation for Corrective Action: Establish procedures for managements review and supervision over tenant?s annual certifications. Specific internal control procedures should be implemented to ensure, for both family income examinations and reexaminations, documentation in the family file of: (1) waiting list documentation; (2) properly executed rent choice documentation; (3) utility allowance schedule annually updated reflecting the current cost and using normal patterns of consumption for the community as a whole, and current local utility rates; and (4) other factors that affect the determination of adjusted income or income-based rent in accordance with 24 CFR section 960. ? Views of Responsible Officials and Planned Corrective Actions: We will review tenant?s files for the deficiencies identified above and implement new internal control procedures to correct these conditions. We will also provide increased supervision and training over this area. We anticipate a complete resolution of this type of error by December 31, 2022.