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Audit follow-up: Housing authority reported related-party tenancy that triggered $69,000 federal finding
Summary
City auditors reported a single-audit finding that a Housing Authority unit had a tenant related to the owner, creating a questioned cost of about $69,000; housing staff say participation was ended and HUD's fraud office was notified.
The Garland Audit Committee on April 8 heard a follow-up on a Weaver single-audit finding that one housing-assistance unit had a landlord–tenant relationship that violated program rules, producing a questioned federal cost of roughly $69,000.
The committee was told the single-audit finding stemmed from testing of about 40 transactions and identified one unit with a family relationship between tenant and owner dating to June 2018. The auditor said anything over $25,000 is reported as a finding in the single-audit process.
The finding was presented by audit staff assigned to the Weaver engagement. Auditor Sarah summarized the matter: “During the course of testing for eligibility, it was found that the tenant and the landlord were related.” She told the committee the condition was one instance out of approximately 40 transactions and the cumulative questioned cost was about $69,000.
Garland Housing staff told the committee they terminated both the landlord’s participation and the participating household once the relationship was confirmed. Steve Fitch, identified at the meeting as director of the housing agency, said the agency reported the case to the U.S. Department of Housing and Urban Development and its fraud unit. “Once we found out that the parties were, in fact, related, we merely moved to, number 1, we terminated the contract with the not only with the landlord, but also with the family,” Fitch said. He added Garland had notified HUD to determine whether HUD would pursue recovery or further action.
Committee members asked for a status update on corrective actions. Councilman BJ Williams asked for a progress report back to council “on progress on this entity” and asked staff to bring recommendations to the city attorney’s office if ordinance changes or other legal steps were needed. City staff indicated corrective actions were in progress and that HUD had been contacted.
The audit follow-up did not present a formal motion beyond the committee’s routine business. Committee members directed staff to return with progress updates; Councilman Williams asked specifically for an initial status report within six months. City staff said they would coordinate with HUD and follow the audit’s action plan steps.
The committee closed the agenda item and moved on to the next report.
