Audit 297648

2023-002 – SPECIAL TESTS AND PROVISIONS – WAGE RATE REQUIREMENTS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.850 – Public and Indian Housing Program CRITERIA The Davis-Bacon Act (DBA) applies to each federal government or District of Columbia contract in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works and requires that contractors and subcontractors pay their laborers and mechanics employed under such contracts no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The DBA’s prevailing wage provisions apply to “Related Acts,” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance. The contractor shall submit weekly for each week in which any contract work is performed… The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), (29 CFR 5.5 (a)(3)) CONDITION The Authority did not obtain copies of the certified payroll related to vacancy / apartment restoration services. CAUSE The Authority was unaware that the DBA applied to this vendor. EFFECT Failure to collect the weekly certified payroll may result in employee’s being paid less than the prevailing wage. QUESTIONED COSTS None CONTEXT Certified payrolls are required to be obtained for each week the contractor performs work. This vendor provided vacancy / apartment restoration services throughout the year. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority obtain copies of the weekly certified payrolls for each contract relating to construction, alteration or repair projects. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-003 – REPORTING – FINANCIAL REPORTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.871 / 14.879 – Housing Voucher Cluster CRITERIA Electronic submission of form HUD-52681-B data is a monthly requirement. The PHA submits this form monthly to HUD electronically via the VMS. Congress has instructed HUD to use VMS data to determine renewal funding levels. HUD also uses VMS data for other funding, monitoring, and SEMAP-related decisions. HUD relies on the audit of the key line items below to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. CONDITION During the first half of fiscal year 2023, the Authority’s internal controls over the submission of VMS to HUD did not include a review or reconciliation of the information submitted to supporting documentation. In June 2023, the Authority implemented a review procedure in which at the end of each quarter a review of the preceding quarter is conducted. CAUSE The Authority had not established sufficient internal controls related to this submission requirement. EFFECT HUD uses the information submitted to determine renewal funding levels, and for other funding and monitoring decisions. Inaccurate information submitted could affect decisions made by HUD. QUESTIONED COSTS None Identified. CONTEXT Electronic submission of form HUD-52681-B data is a monthly requirement. REPEAT FINDING This is repeated from finding 2022-003. RECOMMENDATION The Authority should continue with their corrective action plan which began in April 2023. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-003 – REPORTING – FINANCIAL REPORTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.871 / 14.879 – Housing Voucher Cluster CRITERIA Electronic submission of form HUD-52681-B data is a monthly requirement. The PHA submits this form monthly to HUD electronically via the VMS. Congress has instructed HUD to use VMS data to determine renewal funding levels. HUD also uses VMS data for other funding, monitoring, and SEMAP-related decisions. HUD relies on the audit of the key line items below to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. CONDITION During the first half of fiscal year 2023, the Authority’s internal controls over the submission of VMS to HUD did not include a review or reconciliation of the information submitted to supporting documentation. In June 2023, the Authority implemented a review procedure in which at the end of each quarter a review of the preceding quarter is conducted. CAUSE The Authority had not established sufficient internal controls related to this submission requirement. EFFECT HUD uses the information submitted to determine renewal funding levels, and for other funding and monitoring decisions. Inaccurate information submitted could affect decisions made by HUD. QUESTIONED COSTS None Identified. CONTEXT Electronic submission of form HUD-52681-B data is a monthly requirement. REPEAT FINDING This is repeated from finding 2022-003. RECOMMENDATION The Authority should continue with their corrective action plan which began in April 2023. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-004 – SPECIAL TESTS AND PROVISIONS – CAPITAL FUNDS FOR OPERATING COSTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.872 – Public Housing Capital Fund CRITERIA A PHA may use Capital Funds for operating costs only if it is included in the CFP 5-Year Action Plan that is approved by the PHA Board of Commissioners and HUD, and limited as described in paragraphs (l)(1) and (2) of this section. Capital Funds identified in the CFP 5-Year Action Plan to be transferred to operations are obligated once the funds have been budgeted and drawn down by the PHA. Once such transfer of funds occurs, the PHA must follow the requirements of 24 CFR part 990 with respect to those funds. CONDITION The Authority had obligated capital funds related to operations (BLI 1406) prior to voucher request date for these draws. CAUSE Prior to March 2023, management was unaware of this requirement. EFFECT The Authority had obligated funds for operations prior to the voucher request date of these draws. QUESTIONED COSTS None Identified. CONTEXT The Authority had five open capital fund grants during fiscal year 2023 (Capital Fund formula grants 2020-2023 and an Emergency Capital grant). The Authority drew down funds for operating costs under capital fund year 2022. Total capital fund draws for operating costs under this grant during 2023 aggregated $592,497. REPEAT FINDING This finding is repeated from 2022-007. RECOMMENDATION The Authority should continue with their corrective action plan implemented in April 2023, in which funds are only obligated after which the Authority has a signed contract or agreement in place. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-002 – SPECIAL TESTS AND PROVISIONS – WAGE RATE REQUIREMENTS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.850 – Public and Indian Housing Program CRITERIA The Davis-Bacon Act (DBA) applies to each federal government or District of Columbia contract in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works and requires that contractors and subcontractors pay their laborers and mechanics employed under such contracts no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The DBA’s prevailing wage provisions apply to “Related Acts,” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance. The contractor shall submit weekly for each week in which any contract work is performed… The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), (29 CFR 5.5 (a)(3)) CONDITION The Authority did not obtain copies of the certified payroll related to vacancy / apartment restoration services. CAUSE The Authority was unaware that the DBA applied to this vendor. EFFECT Failure to collect the weekly certified payroll may result in employee’s being paid less than the prevailing wage. QUESTIONED COSTS None CONTEXT Certified payrolls are required to be obtained for each week the contractor performs work. This vendor provided vacancy / apartment restoration services throughout the year. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority obtain copies of the weekly certified payrolls for each contract relating to construction, alteration or repair projects. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-003 – REPORTING – FINANCIAL REPORTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.871 / 14.879 – Housing Voucher Cluster CRITERIA Electronic submission of form HUD-52681-B data is a monthly requirement. The PHA submits this form monthly to HUD electronically via the VMS. Congress has instructed HUD to use VMS data to determine renewal funding levels. HUD also uses VMS data for other funding, monitoring, and SEMAP-related decisions. HUD relies on the audit of the key line items below to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. CONDITION During the first half of fiscal year 2023, the Authority’s internal controls over the submission of VMS to HUD did not include a review or reconciliation of the information submitted to supporting documentation. In June 2023, the Authority implemented a review procedure in which at the end of each quarter a review of the preceding quarter is conducted. CAUSE The Authority had not established sufficient internal controls related to this submission requirement. EFFECT HUD uses the information submitted to determine renewal funding levels, and for other funding and monitoring decisions. Inaccurate information submitted could affect decisions made by HUD. QUESTIONED COSTS None Identified. CONTEXT Electronic submission of form HUD-52681-B data is a monthly requirement. REPEAT FINDING This is repeated from finding 2022-003. RECOMMENDATION The Authority should continue with their corrective action plan which began in April 2023. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-003 – REPORTING – FINANCIAL REPORTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.871 / 14.879 – Housing Voucher Cluster CRITERIA Electronic submission of form HUD-52681-B data is a monthly requirement. The PHA submits this form monthly to HUD electronically via the VMS. Congress has instructed HUD to use VMS data to determine renewal funding levels. HUD also uses VMS data for other funding, monitoring, and SEMAP-related decisions. HUD relies on the audit of the key line items below to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. CONDITION During the first half of fiscal year 2023, the Authority’s internal controls over the submission of VMS to HUD did not include a review or reconciliation of the information submitted to supporting documentation. In June 2023, the Authority implemented a review procedure in which at the end of each quarter a review of the preceding quarter is conducted. CAUSE The Authority had not established sufficient internal controls related to this submission requirement. EFFECT HUD uses the information submitted to determine renewal funding levels, and for other funding and monitoring decisions. Inaccurate information submitted could affect decisions made by HUD. QUESTIONED COSTS None Identified. CONTEXT Electronic submission of form HUD-52681-B data is a monthly requirement. REPEAT FINDING This is repeated from finding 2022-003. RECOMMENDATION The Authority should continue with their corrective action plan which began in April 2023. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-004 – SPECIAL TESTS AND PROVISIONS – CAPITAL FUNDS FOR OPERATING COSTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.872 – Public Housing Capital Fund CRITERIA A PHA may use Capital Funds for operating costs only if it is included in the CFP 5-Year Action Plan that is approved by the PHA Board of Commissioners and HUD, and limited as described in paragraphs (l)(1) and (2) of this section. Capital Funds identified in the CFP 5-Year Action Plan to be transferred to operations are obligated once the funds have been budgeted and drawn down by the PHA. Once such transfer of funds occurs, the PHA must follow the requirements of 24 CFR part 990 with respect to those funds. CONDITION The Authority had obligated capital funds related to operations (BLI 1406) prior to voucher request date for these draws. CAUSE Prior to March 2023, management was unaware of this requirement. EFFECT The Authority had obligated funds for operations prior to the voucher request date of these draws. QUESTIONED COSTS None Identified. CONTEXT The Authority had five open capital fund grants during fiscal year 2023 (Capital Fund formula grants 2020-2023 and an Emergency Capital grant). The Authority drew down funds for operating costs under capital fund year 2022. Total capital fund draws for operating costs under this grant during 2023 aggregated $592,497. REPEAT FINDING This finding is repeated from 2022-007. RECOMMENDATION The Authority should continue with their corrective action plan implemented in April 2023, in which funds are only obligated after which the Authority has a signed contract or agreement in place. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.