Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $17,793 Context: During testing of a sample of 25 disbursements, it was noted that 11 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 6 instances where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micropurchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micropurchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 3. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 4. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 5. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.? When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During testing, it was noted that the Authority did not have adequate internal controls over procurement and suspension and debarment requirements. Questioned Costs: $135,749 Context: During testing of a sample of 7 contracts, it was noted that 7 contracts did not comply with compliance requirements. The sample was a statistically valid sample. ? For 2 contracts tested, the Authority was unable to provide a copy of the contract, or documentation to support the contract was properly procured. ? For 3 contracts tested, the Authority was unable to provide documentation to support that a cost analysis was performed prior to entering the contract. ? For all 7 contracts tested, the Authority was unable to provide documentation that it ensured the vendor was not suspended or debarred before entering into the contract. Cause: The Authority failed to maintain proper documentation of contracts and procurement procedures to evidence compliance. Effect: The Authority is not in compliance with federal regulations regarding procurement of contracts, which could lead to vendors receiving funds that are not properly vetted. Recommendation: We recommend that the Authority reviews it?s procurement policy and active contracts and future contracts to ensure that all policies and procedures regarding procurement of contracts are properly followed and documented. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances, such as when PHAs participate in the Moving to Work Demonstration Program (Assistance Listing 14.881) authorized by 204(c)(1) of Title II of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321-282. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Timing differences in a pooled cash environment would not be considered as temporary loans. Inter-fund transactions indicate the existence of temporary loans. Inter-fund receivables are recorded on FDS line 144 (Inter program ? due from). In particular, inter-fund receivables should be reviewed to determine whether they are satisfied on a timely basis. In addition, FDS lines 10020 (Operating Transfers Out) and 10094 (Transfers Between Programs and Projects ? Out) could indicate whether transfers out of the Operating Fund have been made. If PHAs have transferred funding out of the Operating Fund, proper authorization from HUD should be documented (42 USC 1437g(e)). Condition: During testing, it was noted that the Authority did not properly monitor and reconcile its revolving fund. Questioned Costs: Unknown Context: During our testing over interprogram accounts, it was noted that the COCC has amounts due to public housing under FDS lines 347 and 144 in the amount of $3,787,011. This is a result of the Authority using a revolving fund for expenses. Cause: The Authority failed to properly monitor and reconcile it?s revolving fund between programs. Effect: The Authority is not in compliance with requirements regarding use of operating funds. Recommendation: We recommend the Authority establishes procedures to properly reconcile the revolving fund cash account to ensure that cash and interprogram accounts are properly reported at the program level. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per (24 CFR sections 982.158(d) and 982.404), For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations. Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements. Questioned Costs: $25,491 Context: During our testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 instance where a unit failed inspection and there is no documentation that the unit ever passed. Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection enforcement requirements. Effect: The Authority is not in compliance with federal regulations regarding inspections. The Authority paid HAP expenses for units that do not pass guidelines. Repeat finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: We recommend that management review their controls for conducting follow up inspections on initially failed home inspections and ensure compliance standards are met. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA?s denial of assistance. The PHA must schedule and send written notice of the informal review within 30 business days of the family?s request". Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority?s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant's request. Questioned Costs: Unable to determine. Context: During testing of a sample of 25 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 file where the housing authority failed to grant informal review at applicant request. Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed. Effect: The Authority is not in compliance with their administrative plan and HUD requirements. Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request. Views of Responsible Officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) 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 testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements. Questioned Costs: Unable to determine, projected over $25,000 Context: During our testing of a sample of 40 tenant files, it was noted that 16 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 7 instances where the income reported on the 50058 were not supported within the tenant file. ? 4 instances where the expenses reported on the 50058 were not supported within the tenant file. ? 8 instances where the authority failed to calculate the correct HAP/TAP ? 9 instances where the housing authority did not review the family income, assets and expenses on the annual basis. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of the rent and verification of the tenants income. Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants are met. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) ? The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA?s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058?s into the PIC system for 5 out of 40 files tested. Questioned Costs: Unable to determine. Context: During testing of a sample of 40 HUD 50058 forms, it was noted that 5 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 HUD-50058 forms were not submitted into the PIC system Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding. Recommendation: We recommend that the Authority reviews their standard procedures to ensure the proper forms are submitted to the PIC system. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The PHA?s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes. such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner. The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reasonable rent requirements. Questioned Costs: Unable to determine. Context: During testing of a sample of 25 tenant files, it was noted that 6 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the comparison/determination of reasonable rent was missing, or the report was for a different amount requested. ? 6 instances where the determination of reasonable rent was done after the effective date of the 50058. ? 2 instances where the worksheet and Certification of Rent Comparability form was missing the signature of housing specialist or housing authority representative. ? 5 instances where the landlord and/or tenant was not notified of the rent increase. Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over reasonable rent requirements. Effect: The Authority is not in compliance with federal regulations regarding determining reasonable rent for units. This could potentially effect determination of HAP funding. Recommendation: We recommend that the Authority reviews its procedures to ensure controls over the reasonable rent process. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $53,240 Context: During testing of a sample of 25 disbursements, it was noted that 7 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 1 instance where the documentation provided was not approved prior to disbursement ? 1 instance where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $17,793 Context: During testing of a sample of 25 disbursements, it was noted that 11 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 6 instances where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micropurchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micropurchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 3. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 4. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 5. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.? When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During testing, it was noted that the Authority did not have adequate internal controls over procurement and suspension and debarment requirements. Questioned Costs: $135,749 Context: During testing of a sample of 7 contracts, it was noted that 7 contracts did not comply with compliance requirements. The sample was a statistically valid sample. ? For 2 contracts tested, the Authority was unable to provide a copy of the contract, or documentation to support the contract was properly procured. ? For 3 contracts tested, the Authority was unable to provide documentation to support that a cost analysis was performed prior to entering the contract. ? For all 7 contracts tested, the Authority was unable to provide documentation that it ensured the vendor was not suspended or debarred before entering into the contract. Cause: The Authority failed to maintain proper documentation of contracts and procurement procedures to evidence compliance. Effect: The Authority is not in compliance with federal regulations regarding procurement of contracts, which could lead to vendors receiving funds that are not properly vetted. Recommendation: We recommend that the Authority reviews it?s procurement policy and active contracts and future contracts to ensure that all policies and procedures regarding procurement of contracts are properly followed and documented. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Operating Fund was established for the purpose of making assistance available to PHAs for the operation and management of public housing. Transfers out of the Operating Fund can only occur in very limited circumstances, such as when PHAs participate in the Moving to Work Demonstration Program (Assistance Listing 14.881) authorized by 204(c)(1) of Title II of the Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, 110 Stat. 1321-282. This would preclude PHAs from using Operating Funds to provide temporary loans to other programs within the PHA. Timing differences in a pooled cash environment would not be considered as temporary loans. Inter-fund transactions indicate the existence of temporary loans. Inter-fund receivables are recorded on FDS line 144 (Inter program ? due from). In particular, inter-fund receivables should be reviewed to determine whether they are satisfied on a timely basis. In addition, FDS lines 10020 (Operating Transfers Out) and 10094 (Transfers Between Programs and Projects ? Out) could indicate whether transfers out of the Operating Fund have been made. If PHAs have transferred funding out of the Operating Fund, proper authorization from HUD should be documented (42 USC 1437g(e)). Condition: During testing, it was noted that the Authority did not properly monitor and reconcile its revolving fund. Questioned Costs: Unknown Context: During our testing over interprogram accounts, it was noted that the COCC has amounts due to public housing under FDS lines 347 and 144 in the amount of $3,787,011. This is a result of the Authority using a revolving fund for expenses. Cause: The Authority failed to properly monitor and reconcile it?s revolving fund between programs. Effect: The Authority is not in compliance with requirements regarding use of operating funds. Recommendation: We recommend the Authority establishes procedures to properly reconcile the revolving fund cash account to ensure that cash and interprogram accounts are properly reported at the program level. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Per (24 CFR sections 982.158(d) and 982.404), For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations. Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with failed HQS inspection requirements. Questioned Costs: $25,491 Context: During our testing of a sample of 40 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 instance where a unit failed inspection and there is no documentation that the unit ever passed. Cause: The Authority did not sufficiently monitor staff and internal controls to ensure compliance with HQS inspection enforcement requirements. Effect: The Authority is not in compliance with federal regulations regarding inspections. The Authority paid HAP expenses for units that do not pass guidelines. Repeat finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2021-001. Recommendation: We recommend that management review their controls for conducting follow up inspections on initially failed home inspections and ensure compliance standards are met. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The PHA must have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants for admission from the waiting list. Except as provided in 24 CFR section 982.203 Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24 CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Per Section 16-III.B. Informal Reviews, Scheduling and Informal Review the PHA policy states "A request for an informal review must be made in writing and delivered to the PHA either in person or by first class mail, by the close of the business day, no later than 10 business days from the date of the PHA?s denial of assistance. The PHA must schedule and send written notice of the informal review within 30 business days of the family?s request". Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with waiting listing requirements. Per the Authority?s Administrative Plan, when an applicant requests informal review, the authority must send written notice of the informal review within 30 days of the applicant's request. Questioned Costs: Unable to determine. Context: During testing of a sample of 25 tenant files, it was noted that 1 file did not comply with compliance requirements. The sample was a statistically valid sample. ? 1 file where the housing authority failed to grant informal review at applicant request. Cause: The Authority does not have internal controls to ensure compliance with the waiting list requirements. The Authority is behind schedule on scheduling informal reviews due to pandemic and office being closed. Effect: The Authority is not in compliance with their administrative plan and HUD requirements. Recommendation: We recommend that the Authority reviews their standard procedures to ensure requests for informal reviews are granted and notified to the applicant within 30 days of the receipt of the request. Views of Responsible Officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) 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 testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with eligibility requirements. Questioned Costs: Unable to determine, projected over $25,000 Context: During our testing of a sample of 40 tenant files, it was noted that 16 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 7 instances where the income reported on the 50058 were not supported within the tenant file. ? 4 instances where the expenses reported on the 50058 were not supported within the tenant file. ? 8 instances where the authority failed to calculate the correct HAP/TAP ? 9 instances where the housing authority did not review the family income, assets and expenses on the annual basis. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding eligibility, including the calculation of the rent and verification of the tenants income. Recommendation: We recommend that management review their controls over recertifications and ensure compliance standards for eligibility of tenants are met. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: HUD-50058, Family Report (OMB No. 2577-0083) ? The PHA is required to submit this form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA?s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reporting requirements regarding submissions of HUD-50058?s into the PIC system for 5 out of 40 files tested. Questioned Costs: Unable to determine. Context: During testing of a sample of 40 HUD 50058 forms, it was noted that 5 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 HUD-50058 forms were not submitted into the PIC system Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over submitting the required forms into the PIC system. Effect: The Authority is not in compliance with federal regulations regarding the submission of the HUD-50058 to PIC. The inaccurate data could potentially effect determination of HAP funding. Recommendation: We recommend that the Authority reviews their standard procedures to ensure the proper forms are submitted to the PIC system. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The PHA?s administrative plan must state the method used by the PHA to determine that the rent to owner is reasonable in comparison to rent for other comparable unassisted units. The PHA determination must consider unit attributes. such as the location, quality, size, unit type, and age of the unit, and any amenities, housing services, maintenance, and utilities provided by the owner. The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (2 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During testing, it was noted that the Authority did not have adequate internal controls designed to ensure compliance with reasonable rent requirements. Questioned Costs: Unable to determine. Context: During testing of a sample of 25 tenant files, it was noted that 6 files did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the comparison/determination of reasonable rent was missing, or the report was for a different amount requested. ? 6 instances where the determination of reasonable rent was done after the effective date of the 50058. ? 2 instances where the worksheet and Certification of Rent Comparability form was missing the signature of housing specialist or housing authority representative. ? 5 instances where the landlord and/or tenant was not notified of the rent increase. Cause: The Authority did not have internal controls to ensure compliance with the reporting requirements over reasonable rent requirements. Effect: The Authority is not in compliance with federal regulations regarding determining reasonable rent for units. This could potentially effect determination of HAP funding. Recommendation: We recommend that the Authority reviews its procedures to ensure controls over the reasonable rent process. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: The Authority must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (2 CFR section 200.303(a). Condition: During testing, it was noted that the Authority did not have adequate internal controls over general and payroll disbursements. Questioned Costs: $53,240 Context: During testing of a sample of 25 disbursements, it was noted that 7 disbursements did not comply with compliance requirements. The sample was a statistically valid sample. ? 5 instances where the Authority was unable to provide any documentation of the expense ? 1 instance where the documentation provided was not approved prior to disbursement ? 1 instance where a supervisor did not approve an employee?s timesheet Cause: The Authority failed to maintain proper documentation to support expenses charged to the program. The supervisor failed approve employee?s timesheets. Effect: The Authority is not in compliance with minimum standards to maintain effective internal controls over general disbursements charged to the program. Recommendation: We recommend the Authority reviews the established internal control procedures over charging expenses to programs and ensure the policies are followed for all expenses charged to the program. Additionally, we recommend that the Authority reviews the payroll procedures to ensure all timesheets are approved prior to payment. Views of Responsible Officials: There is no disagreement with the audit finding.