Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Voucher Cluster
Assistance Listing Numbers: 14.871 and 14.879
Federal Award Identification Number and Year: FL080; 2023
Award Period: October 1, 2022 to September 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance,
Material Noncompliance (Modified Opinion)
Criteria or Specific Requirement: The Authority must complete form HUD-50058 for each Housing Choice Voucher (HCV) and Mainstream Voucher tenant. Form HUD-50058 is used to determine a tenant’s eligibility and also determine the tenants’ portion of rent and the Authority’s portion of the rent.
Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230).
The PHA must do the following:
(1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516).
(2) For both family income examinations and reexaminations, obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516).
(3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516).
(4) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR section 982.516).
Condition: During testing of tenant files, certain eligibility and reporting compliance deficiencies were noted as summarized below:
Number of Instances -- Finding
29 -- The Authority was unable to provide a tenant file to review
Of the files the Authority was able to provide. The files contained the following compliance deficiencies:
Number of Instances -- Finding
49 -- The income reported on the 50058 was not supported.
34 -- The assets reported on the 50058 was not supported.
35 -- The expenses reported on the 50058 was not supported.
45 -- The Authority did not review the tenant’s information on an annual basis
40 -- The file was missing the HUD-9886 authorization form.
41 -- The file was missing the Authority general release form.
48 -- The Audit Memo Trail in Yardi was not approved by the housing specialist.
49 -- The HAP information reported in the 50058 did not agree to support.
32 -- The HAP Contract could not be verified to supporting documents.
46 -- The Authority's internal control checklist was missing in the tenant file.
Questioned Costs: Undeterminable; estimated to be over $25,000
Context: Out of 60 housing choice voucher and mainstream voucher tenant files tested, 49 tenant files contained errors as noted above.
Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as it’s administrative plan.
Effect: The Authority is not in compliance with federal regulations regarding eligibility requirements, the calculation of tenant rent and HAP and verification of the tenant’s amounts reported on the HUD-50058.
Repeat Finding: This is a repeat finding from previous years. The finding numbers are 2017-001, 2018-001, 2019-001, 2020-001, 2021-001, and 2022-001.
Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month, to determine if the tenant files were prepared in accordance with internal policies and unit the compliance deficiencies have been corrected. We recommend the Authority to hire outside consultants to assist with eligibility determination and verification or increase staffing in this area.
Views of Responsible Officials: There is no disagreement with the audit finding.