Finding Text
Finding 2023-003 – Public Housing Tenant Files – Eligibility – Rent Calculations
Noncompliance & Significant Deficiency
Public Housing Program – ALN 14.850, Grant Year 2022 & 2023
Condition & cause:
We reviewed seventy-five (75) Public Housing Tenant Files and noted seven (7) files not in compliance, or 9.3%. We noted the following discrepancies:
• Two (2) files with no verification of income;
• Two (2) files that relied on tenant declaration without documenting the reason for not obtaining third-party verification; and
• Three (3) miscalculations of annual income.
The income calculation and verification deficiencies were the result of employee errors and failure by the Agency to properly review and correct the errors. We were able to extrapolate the total potential misstatement and found it to be immaterial to the financial statements. However, due to the percentage of files not in compliance, we feel the Agency has a significant deficiency in this area.
Criteria:
The Code of Federal regulations, the Housing Authority Admissions and Occupancy Plan and specific HUD guidelines in documenting and maintaining Public Housing tenant files.
Effect:
Improper calculation and documentation of tenant income can result in misstatement of the financial statements, improper calculation of operating subsidy, and noncompliance with Federal provisions governing the Public Housing program.
Recommendation:
We recommend that the Agency conduct a thorough tenant file audit of existing tenants to determine whether there are additional deficiencies. We also recommend that the Agency increase their quality control review to adequately monitor compliance with local and federal regulations as it pertains to the maintenance of the tenant files.
Questioned Costs: None
Repeat Finding: Yes
Was sampling statistically valid? Yes