The Trainer — December 2013

Preventing Fraud; Prorating Assistance for Households with Ineligible Noncitizens

In this month’s feature, we gave you five guidelines for preventing fraud and embezzlement. When dealing with a sufficient amount of money there’s bound to be fraudulent activity. Embezzlements are often committed by people who have been with the organization a long time. They’ve worked their way into positions of trust and are key persons in management or accounting. And for the most part, these are ordinary people who give in to the pressures or temptations of the job. Regardless of the size of your organization, you can take steps to mitigate the potential for embezzlement—and reduce the chances that your site will send up red flags that will catch the eyes of HUD auditors.

In our article on “mixed” households—that is, households that, in addition to eligible members, include ineligible noncitizens—we discussed the special rules that apply to calculating the assistance these mixed households can get. The rules on prorating assistance for these households are complicated, so it’s easy to make mistakes. But if you don’t properly calculate the amount of assistance and rent for these mixed households, you could end up having to repay HUD for excess assistance.

QUIZ

QUESTION #1

Which of the following represents a sound rule for separating cash management duties?

a.   The person who prepares the checks should not also be the one who approves and prepares the invoices and purchase orders.

b.   The person who signs the checks should not also be the one who approves invoices, prepares purchase orders, checks, or payroll, or makes purchases.

c.   The person who signs checks should not also be the one who makes bookkeeping entries for accounts payable or the general ledger.

d.   All of the above.

e.   None of the above.

QUESTION #2

You should hire an independent auditing firm to perform an audit once every three years. True or false?

a.   True.

b.   False.

QUESTION #3

HUD’s Office of the Inspector General (OIG) investigates cases of tenant fraud only. True or false?

a.   True.

b.   False.

QUESTION #4

Only households comprised entirely of U.S. citizens are eligible for full federal housing assistance. True or false?

a.   True.

b.   False.

QUESTION #5

Households with both eligible members and ineligible noncitizens can get prorated assistance based on the number of eligible and ineligible members of the household. True or false?

a.   True.

b.   False.

QUESTION #6

A three-person household at a Section 8 site consists of one eligible noncitizen and two ineligible noncitizens. If all members were U.S. citizens or eligible noncitizens, the household would be entitled to $300 a month in housing assistance. Since the household includes two ineligible noncitizens, what should their housing assistance be?

a.   $100.

b.   $200.

c.   $400.

d.   None of the above.

QUESTION #7

A four-person household at a Section 236 site consists of three eligible noncitizens and one ineligible noncitizen. Based on the household’s monthly adjusted income, if all members were U.S. citizens or eligible noncitizens, the household would be entitled to pay the basic rent for the unit of $300. The Section 236 market rent for the unit is $500. How much rent should you charge this household?

a.   $350.

b.   $375.

c.   $450.

d.   None of the above.

QUESTION #8

You have a “mixed” household—one with both eligible members and ineligible noncitizens—at your Section 236 site. The household also gets Section 8 assistance. You must follow either the rules for prorating the Section 236 rent or the rules for prorating the Section 8 assistance payment they’ll get. True or false?

a.   True.

b.   False.