Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Moving to Work Demonstration
Assistance Listing Number: 14.881
Federal Award Identification Number and Year: DC001VO - 2021
Award Period: October 1, 2020 – September 30, 2021
Type of Finding:
Material Weakness in Internal Control over Compliance
Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Beneficiaries must be “low-income families,” as defined in Section 3(b)(2) of the 1937 Housing Act (42 USC 1437a(b)(2)) (Section 204(b) of Pub. L. No. 104-134 (42 USC 1437f (note))). The Authority must ensure that housing assisted under the demonstration meets housing quality standards established or approved by HUD (Section 204(c)(3)(E) of Pub. L. No. 104- 134 (42 USC 1437f (note))).
Condition/Context: A sample of 80 tenant files tested for eligibility over MTW-HCV (40) and MTW-LRPH (40) found exceptions in 20 of the 40 MTW-LRPH files tested and 5 of the 40 MTW-HCV files tested.
The following MTW-LRPH exceptions were noted:
For 5 of 40 files tested, we were unable to observe any of the request backup (recertificaiton printout, income support, checklists, etc.)
For 5 of 40 files tested, support was provided, however, CLA did not observe a 50058 with an effective date prior to, and effective for, the rent payment pulled from rent roll.
For 2 of the 40 files tested, CLA was unable to recalculate annual family income listed in the tenant file to the backup support provided. We did not observe backing support to recalculate the annual income listed on the tested 50058.
For 1 of 40 files tested, CLA did not observe support in the tenant file indicated that family income and composition were examined on a biennial basis.
For 10 of 40 tenant files tested, we did not observe a recertification checklist or the signed Application for Applied Occupancy completed by the specialist.
The following MTW-HCV exceptions were noted:
For 4 of 40 MTW-HCVP samples, we were unable to recalculate the income total listed on the HUD-50058 based on the backing support provided.
For 4 of 40 MTW-HCVP samples, we did not observe a recertification checklist, or a substitute application, showing a specialist's signature (documenting performance of a key internal control)
The sample was statistically valid.
Questioned Costs: Unable to determine.
Cause: The Authority did not sufficiently monitor controls to ensure compliance with eligibility requirements.
Effect: The Authority is not in compliance with federal regulations regarding eligibility. Tenant rent may have been miscalculated due to using incorrect information in the rent calculation. Tenant recertifications were not shown to be performed on a timely basis.
Repeat Finding: The finding is a repeat of finding 2020-001 in the prior audit period. The prior year's finding was a significant deficiency in internal control over compliance.
Recommendation: We recommend that DCHA staff review the controls in place to ensure that required eligibility determination documentation is complete, accurate, and available for audit.
Views of Responsible Officials: There is no disagreement with the audit finding.