FAC Explorer

Finding 6619 (2023-001)

Significant Deficiency
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2023-12-27
Audit: 8545
Organization: Housing Authority of the City of Huntsville (MD)
Auditor: Cliftonlarsonallen LLP

AI Summary

  • Core Issue: A significant deficiency in internal controls was found, leading to incorrect calculations of tenant annual income.
  • Impacted Requirements: The PHA failed to verify and document all necessary income information as required by federal regulations.
  • Recommended Follow-Up: The Authority should enhance its internal controls to ensure accurate income calculations and compliance with eligibility requirements.

Finding Text

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: April 1, 2022 – March 31, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: As a condition of admission or continued occupancy, tenant and other family members must provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). For both family income examinations and reexaminations, the PHA must 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). Condition: Exceptions were noted in 1 out of 40 tenant files tested. Annual income was not calculated utilizing all underlying supporting documentation maintained in the file. Questioned costs: Unable to determine. Context: 40 tenant files were selected from a population of over 250. Cause: Income was inadvertently excluded from the calculation. The Authority’s internal control did not identify the error. Effect: The Authority is not in compliance with eligibility compliance requirements. The tenant’s portion of rent may not be calculated correctly. Repeat Finding: No Recommendation: We recommend that the Authority reviews its internal controls over review of annual income calculations to ensure compliance with eligibility requirements. Views of responsible officials: There is no disagreement with the audit finding.

Corrective Action Plan

Recommendation: We recommend that the Authority reviews its internal controls over review of annual income calculations to ensure compliance with eligibility requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Huntsville Housing Authority (HHA) is restructuring the Public Housing Department to add additional management positions and implement comprehensive standards and operating procedures. These procedures will include clearly defined eligibility processes and enhance quality control measures. Management will conduct oversight of key functions, data entry, and maintain a consistent review of regulatory compliance. Management will complete more targeted and a higher number of quality control audits. Additionally, HHA will increase staff training on key public housing operation functions. HHA is committed to ensure that all employees have proper training in all components of the Public Housing program. Name(s) of the contact person(s) responsible for corrective action: Turkessa Coleman Lacey, Deputy Executive Director Planned completion date for corrective action plan: As of December 15, 2023 the correction action plan is complete and on-going.

Categories

Eligibility HUD Housing Programs Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 583061 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $7.56M
14.872 Public Housing Capital Fund $5.47M
14.871 Section 8 Housing Choice Vouchers $799,659
14.896 Family Self-Sufficiency Program $321,823
14.879 Mainstream Vouchers $302,976
14.267 Continuum of Care Program $280,662
17.274 Youthbuild $217,257
14.870 Resident Opportunity and Supportive Services - Service Coordinators $94,036