Finding Text
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Section 8 Project-Based Cluster Assistance Listing Number: 14.195/14.856 Federal Award Identification Number and Year: MD004 (various funding increments active during period 7/1/21-6/30/22) Award Period: July 1, 2021 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance. ? Material Noncompliance (Modified Opinion) Criteria: As a condition of admission or continue occupancy, PHA?s must determine eligibility of applicants by (a) obtaining signed applications that contain the information needed to determine eligibility (including designation as elderly, disabled, or homeless, if applicable), income, rent, and order of selection; (b) conducting verifications of family income and other pertinent information (such as assets, full time student and immigration status, and unusual medical expenses) through third parties; (c)documenting inspections and tenant certifications, as appropriate; and, (d)determining that tenant income did not exceed the maximum limit set by HUD for the PHA?s jurisdiction, as shown in HUD?s published notice transmitting the Limits for Low-Income and Very Low-Income Families Under the Housing Act of 1937. For the Mod Rehab SRO program, eligible individuals must be homeless upon entry into the program (24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318). The PHA must also select participants from the waiting list in accordance with the admission policies in its administrative plan and maintain documentation which shows that, at the time of admission, the family actually met the preference criteria that determined the family?s place on the waiting list. For the Mod Rehab SRO program, eligible individuals may be referred to the PHA for eligibility determination as a result of the owner?s/sponsor?s outreach or through the PHA waiting list (24 CFR sections 880.603, 881.601, 882.514, 882.808(b)(2), 883.701, 884.214, and 886 subparts A and C). Condition: During our testing, we noted the Commission did not have adequate internal controls designed to ensure that eligibility requirements were being met. Questioned costs: Unknown Context: Testing of 40 tenant files for eligibility standards revealed that 34 files had the following exceptions: - 9 files missing documentation needed to support and recalculate total income per HUD-50059 - 8 files that were missing support needed to substantiate the asset total per HUD-50059 - 7 files that were missing support needed to substantiate the expense total per HUD-50059 - 25 files missing documentation supporting that the tenant was selected from the waitlist in accordance with the Commission?s Administration Plan. - 28 files did not have a certification checklist, or an alternative document, reflecting an HCVP Employee?s signoff on the application or file being completed to document an internal control. Cause: The Commission does not have controls in place to ensure it is meeting eligibility requirements set by HUD. Effect: The Commission is not in compliance with program requirements over eligibility. Repeat Finding: No Recommendation: We recommend the Commission implement processes to ensure that all proper documentation is being maintained during the recertification process for every tenant. View of Responsible Officials: There is no disagreement with the audit finding.