Finding Text
2023-002 Special Tests and Provisions – Income Targeting
Program: U.S. Department of HUD: Section 8 Housing Choice Vouchers (CFDA 14.871)
Type of Finding: Significant Deficiency in Internal Control and Other Matter to be Reported Under the Uniform Guidance
This is a repeat finding of 2022-002 from June 30, 2022 (initially reported June 30, 2021)
Statement of Condition
The Authority did not have adequate controls over income targeting to assure that the Authority is in compliance with this requirement. During our testing, we noted that tenants with incomes that were extremely low accounted for approximately 70% of new admissions during the fiscal year, which is below the minimum required percentage of 75%.
Criteria
During each fiscal year, at least 75% of the Authority’s new admissions in the Housing Choice Voucher Program must have incomes that do not exceed 30% of the area median income (“extremely low”) as published by HUD.
Questioned Costs
None.
Effect
The Authority does not appear to be in compliance with Section 8 income targeting requirements.
Cause
The Authority did not have sufficient internal controls in place to track income targeting. Recommendation
We recommend the Authority assure that at least 75% of new admissions be in the extremely low-income bracket. This should be monitored throughout the year. The Authority can also select applicants on the waiting list who are extremely low income by bypassing others on the list that don’t meet the requirement and documenting that the person was selected ahead of others to be able to meet the requirement.
Views of Responsible Officials of the Auditee:
We concur with the recommendation. We will closely monitor new admissions and focus on applicants on the waiting list who meet the criteria as extremely low income so that the 75% requirement is met.