Finding 980411 (2023-002)

Material Weakness Repeat Finding
Requirement
E
Questioned Costs
$1
Year
2023
Accepted
2024-06-28

AI Summary

  • Core Issue: The Authority failed to comply with HUD regulations regarding tenant eligibility and rent calculations, with multiple documentation errors across selected tenant files.
  • Impacted Requirements: Key documents missing include annual recertifications, signed leases, income verifications, and citizenship forms, among others, affecting 34 out of 40 files reviewed.
  • Recommended Follow-Up: Establish and implement proper procedures for tenant certification and regular reviews to ensure compliance with HUD regulations and timely error detection.

Finding Text

2023-002 Internal Controls over Documentation in Tenant Files (Eligibility) Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low-income housing and that the amount of rent charged to tenants is calculated according to HUD rules and regulations. Condition: The authority had the following noncompliance instances out of the 40 tenant files selected out of 163 total units for testing: • 2 files did not have the appropriate annual recertification performed • 2 files did not contain a signed lease by the tenant • 13 files did have income verifications performed • 3 files did not contain appropriate verification of social security numbers and birth certificates of household members • 4 files did not contain a current Form 9886 • 7 files did not contain a current 50058 form • 12 files did not have signed citizenship forms • 15 files did not have annual rent determination forms • 8 files did not have the appropriate lead-based paint acknowledgement forms • 1 tenant was admitted to the program but was over-income • 34 files did not have an annual inspection performed during the year Questioned Costs: $14,080 Effect: The Authority is not in compliance with applicable HUD regulations regarding tenant eligibility and rent calculations. Cause: The Authority does not have proper procedures in place related to tenant certification and does not have a review procedure in place to detect errors timely. Recommendation: The Authority should establish proper procedures to ensure that the Authority is in compliance with HUD rules for verification of tenant information and calculation of tenant rent. In addition, the Authority should implement review procedures in order to detect errors timely. Management Response: The Authority was NOT provided the listing of the 40 tenant files reviewed with the issues related to each file. This was requested of the auditor when the draft audit report was provided to the Authority and has not been received. The Authority did receive a listing of 13 files but this listing did not contain specifics for each of the tenants listed as to how they fit into this finding.

Categories

Questioned Costs Eligibility HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 403969 2023-002
    Material Weakness Repeat
  • 403970 2023-003
    Material Weakness
  • 403971 2023-004
    Material Weakness Repeat
  • 403972 2023-005
    Material Weakness
  • 980412 2023-003
    Material Weakness
  • 980413 2023-004
    Material Weakness Repeat
  • 980414 2023-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $749,003
14.872 Public Housing Capital Fund $533,179