Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Program/Cluster: Section 8 Housing Choice Vouchers Cluster
Federal Assistance Listing Number: 14.871
Pass-through: N/A
Award No. and Year: CA065 - 2023
Compliance Requirement: Special Tests and Provisions – Utility Allowance Schedule
Type of Finding: Instance of Non-Compliance and Material Weakness in Internal Control over Compliance
Criteria:
Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the review and approval of the utility allowance schedule.
Per the 2023 Compliance Supplement, the public housing authority (PHA) must maintain an up-to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517).
The PHA’s Housing Choice Voucher (HCV) Administrative Plan states that the PHA must maintain information supporting its annual review of utility allowance and any revisions made in its utility allowance schedule.
Condition:
We identified that management did not document their annual review and acceptance of the changes to the utility allowance schedules in effect during the fiscal year 2023. Management asserted that the revisions to the utility allowance schedule are not required to be submitted to the PHA board for approval; however, the HCV Administrative Plan does not delegate the authority to management to approve changes to the utility allowance schedule.
Cause:
The City PHA did not follow its policy to maintain information evidencing its review of revisions to the utility allowance schedule.
Effect:
The City did not comply with the utility allowance schedule requirements.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
The City utilized two utility allowance schedules in the fiscal year 2023. The rates were revised January 1, 2022, and January 1, 2023.
Repeat Finding from Prior Year(s):
No.
Recommendation:
We recommend that the City follow its policy to maintain information supporting its annual review of the utility allowance schedule.
Views of Responsible Officials:
Management concurs with the finding. See separate corrective action plan.