Audit 290651

Finding 2023-001 Allowability of Costs –Ineligible Costs Assistance Listing Number 14.850, Noncompliance - Low Rent Public Housing Criteria- Title 2, Part 200, Uniform Administrative Requirements, states that the entity should "establish and maintain effective internal control over the Federal award and provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes." This requirement also specifies that type of payments allowed and the controls over those payments. Condition- During audit fieldwork, we identified credit card purchases that were for the personal benefit of all employees. The Housing Commission purchased gift cards totaling $1,030 for all employees and gifted to employees as a year-end bonus. The Housing Commission has internal controls in place which require signatures of approval by the Executive Director and a Board Commissioner for all purchases. The purchase was approved by both required parties. Questioned Cost- $1,030 Effect- Non-compliance with the federal allowability requirement. Inability to effectively approve transactions. Cause- Failure to execute controls over the federal allowability compliance requirement Recommendation- We recommend the Commission implement strengthened controls over the approval of credit cards purchases.

Finding 2023-002 Public Housing Program – Tenant Eligibility and Reexaminations Assistance Listing Number 14.850, Noncompliance Low Rent Public Housing Criteria- The Public Housing Occupancy Guidebook and other HUD PIH Notices and Handbooks provide requirements and guidance for which the Public Housing Program is to be administered and operated under with respect to tenant eligibility and reexaminations. Specifically, the Commission must conduct annual reexaminations for all persons and families assisted under the Program. Condition- During audit fieldwork, 10 tenant files were requested and reviewed for compliance with Program eligibility and reexamination requirements. The following discrepancies were noted: -10 files were missing Physical Inspection Reports -2 files did not have a Declaration of Section 214 status -2 files did not have verification of social security numbers -1 file did not perform the annual recertification timely -1 file did not use the correct Utility Allowance -3 files were missing a third party verification of income -5 files did not accurately list assets on HUD 50058 Reexamination Forms -3 files did not run EIV -2 files did not have signed leases Questioned Cost- None noted Context- 24 CFR 960 addresses admissions to and occupancy of Public Housing; 24 CFR 965.505 addresses utility allowances; other PIH notices, HUD handbooks, and CFR's address all other required forms. Effect- Non-compliance with the federal Eligibility requirement. Tenant rents may be miscalculated, other notifications and documentations may be missing. Cause- Failure to execute controls over the federal Eligibility compliance requirement Recommendation- We recommend the Commission implement and execute strengthened controls over the federal Eligibility compliance requirement to include the performance of annual reexaminations and documentation maintenance; the above discrepancies need to be addressed, and all tenant files should be reviewed for compliance.

Finding 2023-001 Allowability of Costs –Ineligible Costs Assistance Listing Number 14.850, Noncompliance - Low Rent Public Housing Criteria- Title 2, Part 200, Uniform Administrative Requirements, states that the entity should "establish and maintain effective internal control over the Federal award and provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes." This requirement also specifies that type of payments allowed and the controls over those payments. Condition- During audit fieldwork, we identified credit card purchases that were for the personal benefit of all employees. The Housing Commission purchased gift cards totaling $1,030 for all employees and gifted to employees as a year-end bonus. The Housing Commission has internal controls in place which require signatures of approval by the Executive Director and a Board Commissioner for all purchases. The purchase was approved by both required parties. Questioned Cost- $1,030 Effect- Non-compliance with the federal allowability requirement. Inability to effectively approve transactions. Cause- Failure to execute controls over the federal allowability compliance requirement Recommendation- We recommend the Commission implement strengthened controls over the approval of credit cards purchases.

Finding 2023-002 Public Housing Program – Tenant Eligibility and Reexaminations Assistance Listing Number 14.850, Noncompliance Low Rent Public Housing Criteria- The Public Housing Occupancy Guidebook and other HUD PIH Notices and Handbooks provide requirements and guidance for which the Public Housing Program is to be administered and operated under with respect to tenant eligibility and reexaminations. Specifically, the Commission must conduct annual reexaminations for all persons and families assisted under the Program. Condition- During audit fieldwork, 10 tenant files were requested and reviewed for compliance with Program eligibility and reexamination requirements. The following discrepancies were noted: -10 files were missing Physical Inspection Reports -2 files did not have a Declaration of Section 214 status -2 files did not have verification of social security numbers -1 file did not perform the annual recertification timely -1 file did not use the correct Utility Allowance -3 files were missing a third party verification of income -5 files did not accurately list assets on HUD 50058 Reexamination Forms -3 files did not run EIV -2 files did not have signed leases Questioned Cost- None noted Context- 24 CFR 960 addresses admissions to and occupancy of Public Housing; 24 CFR 965.505 addresses utility allowances; other PIH notices, HUD handbooks, and CFR's address all other required forms. Effect- Non-compliance with the federal Eligibility requirement. Tenant rents may be miscalculated, other notifications and documentations may be missing. Cause- Failure to execute controls over the federal Eligibility compliance requirement Recommendation- We recommend the Commission implement and execute strengthened controls over the federal Eligibility compliance requirement to include the performance of annual reexaminations and documentation maintenance; the above discrepancies need to be addressed, and all tenant files should be reviewed for compliance.