Finding 978399 (2023-001)

Finding 2023-001 – Housing Choice Voucher Tenant Files – Eligibility – Internal Control over Tenant Files - Noncompliance & Significant Deficiency Housing Choice Voucher Program – ALN 14.871 Condition & Cause: We reviewed two hundred fifty (250) tenant files for full compliance, as well as fifty (50) tenant files for existence, for a total of three hundred (300) tenant files reviewed. Of the two hundred fifty (250) tenant files fully reviewed, we noted twenty-eight (26) tenant files were not in compliance. Of these, twenty-one (21) files, or 8.4% of our sample, contained errors related to adjusted annual income. The income-related discrepancies mainly consist of failure to gather or provide third-party verification of income or deductions and miscalculations of income due to nonconsecutive pay data, improper pay frequencies, or other procedures that are incongruent with the Administrative Plan and Federal Regulations. We were able to extrapolate identified misstatements of HAP and found the potential misstatement to represent 0.07% of program HAP expense, which is immaterial to the financial statements. The remaining discrepancies reflect files for which a biennial inspection was not conducted. We noted two factors that we believe contributed to the tenant file discrepancies. First, the Housing Choice Voucher department has experienced frequent turnover in leadership over the past several audits. Second, the Agency has encountered challenges in their conversion from paper to electronically maintained tenant files. Criteria: The Code of Federal regulations, the Housing Authority Administrative Plan and specific HUD guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Failure to properly verify and calculate annual income can result in a misstatement of HAP expense leading to improper funding for the HCV program. Misstatements of HAP may also cause an undue financial burden to the participant, which goes against the mission of the Agency. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We recommend that the Agency increase their monitoring and quality control review of the HCV program files to determine whether occupancy specialists need additional training or procedures added to ensure compliance. Our experience with agencies that increase monitoring and review of the files is that there are dramatically decreased error rates. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.