Finding 924 (2022-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
-
Year
2022
Accepted
2023-10-30

AI Summary

  • Core Issue: The Housing Authority failed to conduct required unit inspections and maintain proper documentation for tenant income verification, leading to potential misreporting of income.
  • Impacted Requirements: Compliance with OMB Uniform Guidance for annual income verification, timely recertifications, and mandatory unit inspections.
  • Recommended Follow-Up: Urgently complete all overdue recertifications and ensure annual inspections are conducted for all units as mandated.

Finding Text

2022-002 - Determination of Contract Rents and Maintenance of Tenant Files Criteria: OMB Uniform Guidance Compliance Supplement for the Section 8 Housing Assistance Program requires that for all family income examinations and reexaminations, the Housing Authority must obtain and document third-party verification of (1) reported family income, (2) the value of assets, (3) expenses related to deductions, and (4) other factors that affect the determination of adjusted income or income-based rent at least once every 12 months. The program also includes other non-financial eligibility requirements, including required unit inspections on an annual basis. Condition: • We did not note any evidence of unit inspections in the 40 files reviewed. • We noted 8 files out of 40 tested did not contain sufficient income verification documentation. • We noted 5 files out of 40 tested did not have an accurately calculated rent and HAP. • We noted 2 files out of 40 tested did not receive a timely recertification. Cause: Backlog of recertifications was created by turnover issues and lack of management oversight in the prior year(s). Housing Authority has worked to get all files back up to date. Effect: Tenant rental charges are determined based on 30% of their adjusted income total. Improper verification of income allows for misreporting of income which may affect the rental income received by the Housing Authority and can potentially affect their Housing Assistance receipts and future federal funding. Housing unit conditions were not inspected or reviewed by the Housing Authority. Questioned Costs: Undetermined Recommendation: We recommend that Housing Authority work to immediately perform proper recertifications for all tenants for which have been done incorrectly or not performed at all. We recommend the Housing Authority perform inspections for all units annually as required. Views of Responsible Officials and Planned Corrective Action: The Housing Authority believes they have all files up to date and with sufficient supporting documentation into 2023. The Housing Authority staff also plans to take continuing education courses on the management of the RAD program. The Housing Authority plans to inspected all units prior to the end of 2023.

Corrective Action Plan

Corrective Action Plan for Findings and Questioned Costs for Year Ended December 31, 2022 Corrective Action Plan Finding: 2022-001- Material Adjusting Journal Entries Condition: Various financial statements amounts including: prepaid expenses, federal awards revenues and federal award receivables were either misstated or improperly recorded at year-end. As a result of the audit procedures performed, material audit adjustments were required to be recorded. Corrective Action Planned: Adjustments determined to be one-time errors due to the difficult working conditions through the pandemic and due to limited staff. Management has employed an additional administrative support staff employee during the current year. Management does not expect issues related to these accounts moving forward. Person responsible for corrective action: Larry Pippins, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management believes the issues to be rectified as it relates to the material audit adjustments as of the report date. 2022-002- Determination of Contract Rents, Maintenance of Tenant Files Condition: Eligibility recertification procedures required as a part of the annual recertification have not been performed or not performed sufficiently for tenants housed as of December 31, 2022. Corrective Action Planned: Management employed an additional administrative support employee to assist in performing updated annual recertifications. Staff has worked diligently to get all tenants housed at the Housing Authority recertified with sufficient documentation. Management believes all issues with tenant files to be corrected as of the report date. Person responsible for corrective action: Larry Pippins, Executive Director Telephone: (256) 232-5300 x 8 Tina Watkins-Toney, Property Manager Anticipated Completion Date: Management believes files have been corrected as of the 2022 year-end audit report date.

Categories

Eligibility HUD Housing Programs Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 577366 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.195 Section 8 Housing Assistance Payments Program $1.17M