Finding 626901 (2022-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-28
Audit: 45206
Organization: City of West Allis (WI)

AI Summary

  • Core Issue: The City did not keep proper documentation to show that rent was reasonable for tenants, violating federal requirements.
  • Impacted Requirements: The PHA must assess and document rent reasonableness at lease initiation and during the contract term, especially before rent increases.
  • Recommended Follow-Up: The City should improve its internal controls and procedures to ensure compliance with rent reasonableness documentation requirements.

Finding Text

2022 ? 002: Reasonable Rent Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2022 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHS must maintain records to document the bases for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of rent reasonableness schedule as stated in the criteria section of this finding. Questioned Costs: Known - Undeterminable; Likely - Undeterminable Context: From a sample of sixty (60) program participant files selected for testing, four (4) tenant files did not include documentation of performance of rent reasonableness prior to the lease date; one (1) tenant file had rent reasonableness documented more than twelve months prior to the effective date; two (2) files did not have documentation of rent reasonableness being completed; and eleven (11) tenant files did not have documentation maintained of the completion of the fiscal year 2022 rent reasonableness as the 2023 process had already been performed. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: Yes; 2021-003 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

Categories

HUD Housing Programs Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 50458 2022-001
    Material Weakness Repeat
  • 50459 2022-002
    Material Weakness Repeat
  • 50460 2022-003
    Significant Deficiency
  • 50461 2022-004
    Significant Deficiency Repeat
  • 50462 2022-005
    Material Weakness
  • 50463 2022-001
    Material Weakness Repeat
  • 50464 2022-002
    Material Weakness Repeat
  • 50465 2022-003
    Significant Deficiency
  • 50466 2022-004
    Significant Deficiency Repeat
  • 50467 2022-005
    Material Weakness
  • 626900 2022-001
    Material Weakness Repeat
  • 626902 2022-003
    Significant Deficiency
  • 626903 2022-004
    Significant Deficiency Repeat
  • 626904 2022-005
    Material Weakness
  • 626905 2022-001
    Material Weakness Repeat
  • 626906 2022-002
    Material Weakness Repeat
  • 626907 2022-003
    Significant Deficiency
  • 626908 2022-004
    Significant Deficiency Repeat
  • 626909 2022-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $4.35M
95.001 High Intensity Drug Trafficking Areas Program $2.62M
14.218 Community Development Block Grants/entitlement Grants $1.13M
14.871 Section 8 Housing Choice Vouchers $419,804
16.754 Harold Rogers Prescription Drug Monitoring Program $357,573
16.838 Comprehensive Opioid Abuse Site-Based Program $207,990
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $166,021
16.922 Equitable Sharing Program $114,995
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $65,066
93.268 Immunization Cooperative Agreements $50,247
10.561 Community Development Block Grants/entitlement Grants $41,956
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $35,255
14.239 Home Investment Partnerships Program $21,398
93.136 Injury Prevention and Control Research and State and Community Based Programs $19,563
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $18,921
93.991 Preventive Health and Health Services Block Grant $17,469
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $14,345
16.607 Bulletproof Vest Partnership Program $12,886
20.616 National Priority Safety Programs $11,901
16.710 Public Safety Partnership and Community Policing Grants $9,641
93.994 Maternal and Child Health Services Block Grant to the States $8,815
16.034 Coronavirus Emergency Supplemental Funding Program $8,128
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $7,534
10.528 Usda Wic Telehealth Evaluation Collaborative (b) $5,499
66.818 Brownfields Assessment and Cleanup Cooperative Agreements $4,849
16.001 Law Enforcement Assistance_narcotics and Dangerous Drugs_laboratory Analysis $2,461
20.600 State and Community Highway Safety $1,324
93.069 Public Health Emergency Preparedness $109
14.U01 Section 8 Fss Escrow Forfeiture Account $74
93.103 Food and Drug Administration_research $-129