Finding 8217 (2023-003)

Findings and Questioned Costs Related to the Audit of Federal Awards (continued) Finding: 2023‐003 U.S. Department of Housing & Urban Development Program Name: Public Housing Operating Fund AL Number: 14.850 Non-Material Non‐Compliance Material Weakness, Eligibility Criteria: In accordance with 2 CFR 200, management should have an adequate system of internal control procedures in place to ensure that applicants have all required documentation in their file. In accordance with 24 CFR Part 5 Subpart F, the City must maintain documentation to support tenant eligibility. Condition: The Public Housing Department did not follow procedures to ensure the proper eligibility determination were made and documented. Context: Of the 185 applicants during the current year valued at $749,487, we examined 37 (valued at $133,566) and determined that 1 (1% valued at $3,610) applicant was not supported with case documentation to confirm eligibility. We also determined that two applicants (6% valued at $7,220) had inconsistent documentation supporting eligibility determination in the case file. Upon further review, these two applicants were deemed eligible. Effect: Participants could receive benefits for which they are not eligible. Cause: Weakness in implementation of controls over eligibility procedures. Due to the turnover in the housing department, the City failed to obtain or retain the completed eligibility documentation. Identification of a Repeat Finding: This is a modified, repeat finding from the immediate previous audit, 2022-004. Questioned Cost: In accordance with 2 CFR 200, auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Even though the sample results only identified $3,610 in questioned costs, if tests were extended to the entire population, questioned costs could exceed $25,000. Recommendation: Management should adhere to the program’s policy and maintain proper eligibility documentation in the applicant’s file. Views of Responsible Officials and Planned Corrective Actions: The City agrees with this finding. Please refer to the Corrective Action Plan section of this report.