Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Low Rent Public Housing
Assistance Listing Numbers: 14.850
Federal Award Identification Number and Year: FL080; 2023
Award Period: October 1, 2022 to September 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance,
Noncompliance (Other Matters)
Criteria or Specific Requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615).
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 960.259).
(2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259).
(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 sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259).
(4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208).
(5) 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 sections 960.253, 960.257, and 960.259).
Condition: During the testing of the Public Housing Program tenant files, a compliance deficiency was noted:
Of the 60 tenant files provided, auditor noted the following items:
Number of Instances -- Finding
5 -- The tenant file was missing a signed 9886 general release form for one or more of the residents.
4 -- The tenant file was missing a signed 214 form for one or more tenants.
9 -- The quality control checklist was not signed by the housing specialist.
1 -- The recertification was not completed for the selected effective date.
6 -- The income reported on the HUD-50058 was incorrectly reported or support could not be provided for the reported income.
3 -- The family income and composition was not reexamined annually.
1 -- The expenses reported on the HUD-50058 was incorrectly reported.
2 -- The assets reported on the HUD-50058 was incorrectly reported.
Undeterminable; estimated to be over $25,000
Context: Out of 60 public housing tenant files tested, 22 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 their ACOP.
Effect: The Authority is not in compliance with federal regulations regarding the verification of the tenants income and maintaining adequate documents per the compliance requirements.
Repeat Finding: No.
Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month and to determine if the tenant files were prepared in accordance with internal policies and until the compliance deficiencies have been corrected. We recommend the Authority to hire outside consultants to assist with eligibility requirements or increase staffing in this area.
Views of Responsible Officials: There is no disagreement with the audit finding.