Finding 972359 (2023-001)

Material Weakness
Requirement
E
Questioned Costs
-
Year
2023
Accepted
2024-05-06
Audit: 305538

AI Summary

  • Core Issue: The Authority failed to complete required income recertifications for tenants, leading to noncompliance with eligibility requirements.
  • Impacted Requirements: Compliance with 24 CFR section 982.516, which mandates biennial income and family composition reviews.
  • Recommended Follow-Up: Conduct a thorough review of all tenant files to ensure accurate recertification and housing assistance payments, and implement the new compliance training and workflow improvements.

Finding Text

Finding: 2023-001 Program Name: Moving to Work (ALN #14.881) Federal Awarding Agency: Department of Housing and Urban Development Compliance Requirement: Eligibility Type of Finding: Material Weakness; Material Noncompliance Qualification Criteria: Per 24 CFR section 982.516, the Authority must reexamine family income and composition at least once every two years and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification. Condition: Of the 25 Housing Choice Voucher tenant files tested, the annual recertification was not completed for five tenant files and the information from the prior year 50058 was rolled forward without verification of current income. For two additional tenant files, the 50058 was rolled forward without updating as required; however, the income was later recertified. Cause: During fiscal year 2023, the Authority had employee turnover resulting in a backlog of recertifications. Because payments to landlords on the annual HAP contracts were set to expire, the Authority rolled forward the tenant’s prior year form HUD-50058 Family Report without updating family income and composition. Effect: The Authority was not in compliance with the eligibility compliance requirements for the year ended June 30, 2023. Failure to perform income recertifications could result in improper housing assistance payments. Auditor Recommendation: We recommend the Authority perform a review of all tenant files to ensure income has been appropriately recertified and housing assistance payments are accurate. Questioned Costs: Undeterminable. Management’s Response: LMHA has implemented a comprehensive plan to resolve the backlog of recertifications that necessitated the roll forward of tenant’s prior year form HUD-50058 family report without updating family income and composition. First and foremost, representing the rolling forward of the tenant’s HUD-50058 as a biennial recertification has been discontinued. Compliance staff has implemented training of Housing Specialists and other staff to assure biennial recertification and use of HUD-50058 Type 2 (“Annual Recertification”) will now be compliant. LMHA has contracted with a vendor to assist with the recertification process. LMHA has also restructured workflows to provide efficiencies and accountability that will promote compliance. LMHA is also working with various HUD departments and personnel to assess noncompliance and how to move forward. In addition to resolving these issues with HUD, LMHA has engaged its Financial Auditor, Cherry Bekaert, to review the Housing Choice Voucher Program for process, compliance, and internal control.

Categories

HUD Housing Programs Eligibility Material Weakness Internal Control / Segregation of Duties

Other Findings in this Audit

  • 395911 2023-001
    Material Weakness
  • 395912 2023-002
    Material Weakness
  • 395913 2023-003
    Material Weakness
  • 395914 2023-001
    Material Weakness
  • 395915 2023-002
    Material Weakness
  • 395916 2023-003
    Material Weakness
  • 395917 2023-001
    Material Weakness
  • 395918 2023-002
    Material Weakness
  • 395919 2023-003
    Material Weakness
  • 972353 2023-001
    Material Weakness
  • 972354 2023-002
    Material Weakness
  • 972355 2023-003
    Material Weakness
  • 972356 2023-001
    Material Weakness
  • 972357 2023-002
    Material Weakness
  • 972358 2023-003
    Material Weakness
  • 972360 2023-002
    Material Weakness
  • 972361 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.881 Moving to Work Demonstration Program $111.94M
14.879 Mainstream Vouchers $1.93M
14.871 Section 8 Housing Choice Vouchers $1.42M
14.889 Choice Neighborhoods Implementation Grants $1.19M
14.856 Lower Income Housing Assistance Program_section 8 Moderate Rehabilitation $982,292
14.896 Family Self-Sufficiency Program $571,830
14.870 Resident Opportunity and Supportive Services - Service Coordinators $287,046