U.S. Department of Housing and Urban Development ‐ CFDA #14.871
Section 8 Housing Choice Vouchers
Applicable Federal Award Number and Year – Section 8 Housing Choice Vouchers ‐ 2021
Special Tests and Provisions – HQS Enforcement
Material Weakness in Internal Control over Compliance and Material Instance of Non‐Compliance
Criteria – For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct 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.
Condition – During our testing of failed HQS inspections, we identified 13 instances where a lifethreatening issue was not resolved within 24 hours.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 failed inspections were selected for testing. 13 out of the 60 failed inspections did not have documentation of a life‐threatening issue being resolved within 24 hours.
Effect – Failure to implement and maintain a proper control process could result in failure to complete the required inspections in the required time period, resulting in unauthorized
payments.
Cause – The Authority has experienced significant staff turnover and due to a lack of oversight the appropriate steps were not documented to ensure compliance with the program
requirements.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that processes are implemented to ensure compliance with program requirements for failed HQS inspections.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.871
Section 8 Housing Choice Vouchers
Applicable Federal Award Number and Year – Section 8 Housing Choice Vouchers ‐ 2021
Special Tests and Provisions – HQS Enforcement
Material Weakness in Internal Control over Compliance and Material Instance of Non‐Compliance
Criteria – For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct 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.
Condition – During our testing of failed HQS inspections, we identified 13 instances where a lifethreatening issue was not resolved within 24 hours.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 failed inspections were selected for testing. 13 out of the 60 failed inspections did not have documentation of a life‐threatening issue being resolved within 24 hours.
Effect – Failure to implement and maintain a proper control process could result in failure to complete the required inspections in the required time period, resulting in unauthorized
payments.
Cause – The Authority has experienced significant staff turnover and due to a lack of oversight the appropriate steps were not documented to ensure compliance with the program
requirements.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that processes are implemented to ensure compliance with program requirements for failed HQS inspections.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Eligibility
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – The Authority could not find the 2021 tenant file for 1 participant. In addition, there was 1 participant file in which the HUD‐50059 form was not signed by either the participant or the Authority.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files could not be found. 1 out of the 60 tenant files contained a HUD‐50059 form that was not signed.
Effect – Failure to implement and maintain a proper control process could result in payments to individuals that are not eligible.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that all tenant files are maintained and that all forms are signed by both the participant and the Authority.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Reporting
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to submit reports HUD‐52663, Requisition for Partial Payment of Annual Contributions, which is submitted quarterly, and HUD‐52681, Voucher for Payment of Annual Contributions and Operating Statement, which is submitted annually.
Condition – The Authority was not able to provide us with signed and dated copies for all the original HUD‐52663 and HUD‐52681 reports submitted for 2021. In addition, the Authority did not timely submit revised HUD‐52663 and HUD‐52681 reports after the Authority had received notification from certain landlords who were opting out of the Mod Rehab program in 2021.
Questioned Costs – None Reported.
Context/Sampling – N/A.
Effect – Failure to implement and maintain a proper control process resulted in improper funding from HUD and having to repay HUD for the overpayments.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that amended reports are submitted timely to HUD and that copies of all reports that have been submitted are maintained.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Eligibility
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – The Authority could not find the 2021 tenant file for 1 participant. In addition, there was 1 participant file in which the HUD‐50059 form was not signed by either the participant or the Authority.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files could not be found. 1 out of the 60 tenant files contained a HUD‐50059 form that was not signed.
Effect – Failure to implement and maintain a proper control process could result in payments to individuals that are not eligible.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that all tenant files are maintained and that all forms are signed by both the participant and the Authority.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Reporting
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to submit reports HUD‐52663, Requisition for Partial Payment of Annual Contributions, which is submitted quarterly, and HUD‐52681, Voucher for Payment of Annual Contributions and Operating Statement, which is submitted annually.
Condition – The Authority was not able to provide us with signed and dated copies for all the original HUD‐52663 and HUD‐52681 reports submitted for 2021. In addition, the Authority did not timely submit revised HUD‐52663 and HUD‐52681 reports after the Authority had received notification from certain landlords who were opting out of the Mod Rehab program in 2021.
Questioned Costs – None Reported.
Context/Sampling – N/A.
Effect – Failure to implement and maintain a proper control process resulted in improper funding from HUD and having to repay HUD for the overpayments.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that amended reports are submitted timely to HUD and that copies of all reports that have been submitted are maintained.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Eligibility
Material Weakness in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – During our testing, we identified an error in the tenant rent calculation for 1 individual that was not detected by the Authority’s internal controls. In addition, there was no review of any of the rent calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files had an incorrect rent calculation.
Effect – Failure to implement and maintain a proper control process could result in incorrect calculations of income, which could cause errors in eligibility determinations.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should implement controls to ensure eligibility requirements are being followed and that there is a review of tenant eligibility calculations by another individual.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Special Tests and Provisions: Project‐Based Budgeting and Accounting
Material Weakness in Internal Control over Compliance
Criteria – PHAs who have implemented asset management are to develop and maintain a system of budgeting and accounting for each project in a manner that allows for analysis of actual revenues and expenses associated with each property (24 CFR section 990.280(a)).
Condition – During our testing, we identified several errors in how expenses were being charged and or allocated to the projects. In addition, there was insufficient documentation supporting how allocation methods were determined and there was no review of the allocation calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 12 out of the 60 expenditures utilized an allocation method that was incorrect or lacked sufficient documentation on how the allocation method was determined.
Effect – Failure to implement and maintain a proper control process could result in the misallocation of costs to a project or the program.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that all allocation methods are reviewed and adjusted regularly for changes within the program. Additionally, a control process should be implemented to review the application of allocation methods and their reasonableness.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Procurement, Suspension and Debarment
Significant Deficiency in Internal Control over Compliance
Criteria – Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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.
Condition – During our testing, we observed that the Authority had not retained documentation that they had performed a search for suspension and debarment. Upon our search, none of the vendors were suspended or debarred.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 60 out of the 60 transactions did not have proper documentation that the vendor was not suspended or disbarred.
Effect – Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had performed a search for suspension and debarment.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain documentation showing they performed a search for suspension and debarment and proper research for sole source determinations.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Eligibility
Material Weakness in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – During our testing, we identified an error in the tenant rent calculation for 1 individual that was not detected by the Authority’s internal controls. In addition, there was no review of any of the rent calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files had an incorrect rent calculation.
Effect – Failure to implement and maintain a proper control process could result in incorrect calculations of income, which could cause errors in eligibility determinations.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should implement controls to ensure eligibility requirements are being followed and that there is a review of tenant eligibility calculations by another individual.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Special Tests and Provisions: Project‐Based Budgeting and Accounting
Material Weakness in Internal Control over Compliance
Criteria – PHAs who have implemented asset management are to develop and maintain a system of budgeting and accounting for each project in a manner that allows for analysis of actual revenues and expenses associated with each property (24 CFR section 990.280(a)).
Condition – During our testing, we identified several errors in how expenses were being charged and or allocated to the projects. In addition, there was insufficient documentation supporting how allocation methods were determined and there was no review of the allocation calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 12 out of the 60 expenditures utilized an allocation method that was incorrect or lacked sufficient documentation on how the allocation method was determined.
Effect – Failure to implement and maintain a proper control process could result in the misallocation of costs to a project or the program.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that all allocation methods are reviewed and adjusted regularly for changes within the program. Additionally, a control process should be implemented to review the application of allocation methods and their reasonableness.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Procurement, Suspension and Debarment
Significant Deficiency in Internal Control over Compliance
Criteria – Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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.
Condition – During our testing, we observed that the Authority had not retained documentation that they had performed a search for suspension and debarment. Upon our search, none of the vendors were suspended or debarred.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 60 out of the 60 transactions did not have proper documentation that the vendor was not suspended or disbarred.
Effect – Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had performed a search for suspension and debarment.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain documentation showing they performed a search for suspension and debarment and proper research for sole source determinations.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Cash Management
Material Weakness in Internal Control over Compliance
Criteria – The Authority is to maintain supporting documentation for the reimbursement of costs incurred prior to the drawdown of program funds.
Condition – During out testing, we identified differences in the amounts drawn down for the Capital Fund program and the amounts recorded in the general ledger, resulting in material proposed audit adjustments. In addition, there was no review by another individual prior to the drawdown of funds.
Questioned Costs – None Reported.
Context/Sampling – Not Applicable.
Effect – Insufficient documentation was maintained and there was no review in place, which resulted in funds being inaccurately recorded in the accounting system.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain supporting documentation for the amounts drawn down and ensure the amounts are properly recorded. In addition, we recommend that another individual perform a review prior to the funds being drawn down.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Procurement, Suspension and Debarment
Significant Deficiency in Internal Control over Compliance
Criteria – Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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.
Condition – During our testing of suspension and debarment, we observed that the Authority had not retained documentation that they had performed a search for suspension and debarment. Upon our search, none of the vendors were suspended or debarred.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 8 expenditures were selected for testing. 8 out of the 8 transactions did not have proper documentation that the vendor was not suspended or disbarred.
Effect – Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had performed a search for suspension and debarment.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain documentation showing they performed a search for suspension and debarment.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Special Tests and Provisions – Capital Funds for Operating Costs
Significant Deficiency in Internal Control over Compliance
Criteria – A complete system of internal control contemplates for the development of a process to track and monitor the obligation and expenditure of program funds to ensure they are within program guidelines and requirements.
Condition – During our testing it was determined there was no consistent, documented process to ensure the timely obligation and expenditure of program funds to remain in compliance.
Questioned Costs – None Reported.
Context/Sampling – Not Applicable.
Effect – Failure to implement and maintain a proper control process could result in failure to meet the obligation and expenditure requirements of the program, resulting in the loss of funding.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had monitored the various program requirements to ensure compliance.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should develop a process and maintain documentation showing they are consistently monitoring the obligation and expenditure requirements of the program.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Special Tests and Provisions – Environmental Reviews
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires an environmental review must be completed every 5 years for any project or activities before a PHA may acquire, rehabilitate, convert, lease, repair or construct property, or commit HUD or local funds at an assisted or to‐be‐assisted site.
Condition – The Authority has not had an environmental review completed for 3 of the 4 projects.
Questioned Costs – None Reported.
Context/Sampling – N/A
Effect – Failure to implement and maintain a proper control process resulted in environmental reviews not being completed on 3 of the 4 projects.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that an environmental review is completed for all projects at least every 5 years.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.871
Section 8 Housing Choice Vouchers
Applicable Federal Award Number and Year – Section 8 Housing Choice Vouchers ‐ 2021
Special Tests and Provisions – HQS Enforcement
Material Weakness in Internal Control over Compliance and Material Instance of Non‐Compliance
Criteria – For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct 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.
Condition – During our testing of failed HQS inspections, we identified 13 instances where a lifethreatening issue was not resolved within 24 hours.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 failed inspections were selected for testing. 13 out of the 60 failed inspections did not have documentation of a life‐threatening issue being resolved within 24 hours.
Effect – Failure to implement and maintain a proper control process could result in failure to complete the required inspections in the required time period, resulting in unauthorized
payments.
Cause – The Authority has experienced significant staff turnover and due to a lack of oversight the appropriate steps were not documented to ensure compliance with the program
requirements.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that processes are implemented to ensure compliance with program requirements for failed HQS inspections.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.871
Section 8 Housing Choice Vouchers
Applicable Federal Award Number and Year – Section 8 Housing Choice Vouchers ‐ 2021
Special Tests and Provisions – HQS Enforcement
Material Weakness in Internal Control over Compliance and Material Instance of Non‐Compliance
Criteria – For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct 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.
Condition – During our testing of failed HQS inspections, we identified 13 instances where a lifethreatening issue was not resolved within 24 hours.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 failed inspections were selected for testing. 13 out of the 60 failed inspections did not have documentation of a life‐threatening issue being resolved within 24 hours.
Effect – Failure to implement and maintain a proper control process could result in failure to complete the required inspections in the required time period, resulting in unauthorized
payments.
Cause – The Authority has experienced significant staff turnover and due to a lack of oversight the appropriate steps were not documented to ensure compliance with the program
requirements.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that processes are implemented to ensure compliance with program requirements for failed HQS inspections.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Eligibility
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – The Authority could not find the 2021 tenant file for 1 participant. In addition, there was 1 participant file in which the HUD‐50059 form was not signed by either the participant or the Authority.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files could not be found. 1 out of the 60 tenant files contained a HUD‐50059 form that was not signed.
Effect – Failure to implement and maintain a proper control process could result in payments to individuals that are not eligible.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that all tenant files are maintained and that all forms are signed by both the participant and the Authority.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Reporting
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to submit reports HUD‐52663, Requisition for Partial Payment of Annual Contributions, which is submitted quarterly, and HUD‐52681, Voucher for Payment of Annual Contributions and Operating Statement, which is submitted annually.
Condition – The Authority was not able to provide us with signed and dated copies for all the original HUD‐52663 and HUD‐52681 reports submitted for 2021. In addition, the Authority did not timely submit revised HUD‐52663 and HUD‐52681 reports after the Authority had received notification from certain landlords who were opting out of the Mod Rehab program in 2021.
Questioned Costs – None Reported.
Context/Sampling – N/A.
Effect – Failure to implement and maintain a proper control process resulted in improper funding from HUD and having to repay HUD for the overpayments.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that amended reports are submitted timely to HUD and that copies of all reports that have been submitted are maintained.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Eligibility
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – The Authority could not find the 2021 tenant file for 1 participant. In addition, there was 1 participant file in which the HUD‐50059 form was not signed by either the participant or the Authority.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files could not be found. 1 out of the 60 tenant files contained a HUD‐50059 form that was not signed.
Effect – Failure to implement and maintain a proper control process could result in payments to individuals that are not eligible.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that all tenant files are maintained and that all forms are signed by both the participant and the Authority.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.182 / 14.856
Section 8 Project‐based Cluster
Applicable Federal Award Number and Year – Section 8 Project‐based Cluster ‐ 2021
Reporting
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires the Authority to submit reports HUD‐52663, Requisition for Partial Payment of Annual Contributions, which is submitted quarterly, and HUD‐52681, Voucher for Payment of Annual Contributions and Operating Statement, which is submitted annually.
Condition – The Authority was not able to provide us with signed and dated copies for all the original HUD‐52663 and HUD‐52681 reports submitted for 2021. In addition, the Authority did not timely submit revised HUD‐52663 and HUD‐52681 reports after the Authority had received notification from certain landlords who were opting out of the Mod Rehab program in 2021.
Questioned Costs – None Reported.
Context/Sampling – N/A.
Effect – Failure to implement and maintain a proper control process resulted in improper funding from HUD and having to repay HUD for the overpayments.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that amended reports are submitted timely to HUD and that copies of all reports that have been submitted are maintained.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Eligibility
Material Weakness in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – During our testing, we identified an error in the tenant rent calculation for 1 individual that was not detected by the Authority’s internal controls. In addition, there was no review of any of the rent calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files had an incorrect rent calculation.
Effect – Failure to implement and maintain a proper control process could result in incorrect calculations of income, which could cause errors in eligibility determinations.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should implement controls to ensure eligibility requirements are being followed and that there is a review of tenant eligibility calculations by another individual.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Special Tests and Provisions: Project‐Based Budgeting and Accounting
Material Weakness in Internal Control over Compliance
Criteria – PHAs who have implemented asset management are to develop and maintain a system of budgeting and accounting for each project in a manner that allows for analysis of actual revenues and expenses associated with each property (24 CFR section 990.280(a)).
Condition – During our testing, we identified several errors in how expenses were being charged and or allocated to the projects. In addition, there was insufficient documentation supporting how allocation methods were determined and there was no review of the allocation calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 12 out of the 60 expenditures utilized an allocation method that was incorrect or lacked sufficient documentation on how the allocation method was determined.
Effect – Failure to implement and maintain a proper control process could result in the misallocation of costs to a project or the program.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that all allocation methods are reviewed and adjusted regularly for changes within the program. Additionally, a control process should be implemented to review the application of allocation methods and their reasonableness.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Procurement, Suspension and Debarment
Significant Deficiency in Internal Control over Compliance
Criteria – Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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.
Condition – During our testing, we observed that the Authority had not retained documentation that they had performed a search for suspension and debarment. Upon our search, none of the vendors were suspended or debarred.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 60 out of the 60 transactions did not have proper documentation that the vendor was not suspended or disbarred.
Effect – Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had performed a search for suspension and debarment.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain documentation showing they performed a search for suspension and debarment and proper research for sole source determinations.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Eligibility
Material Weakness in Internal Control over Compliance
Criteria – The Program requires the Authority to determine eligibility of participants of the program through annual and interim review of participant information.
Condition – During our testing, we identified an error in the tenant rent calculation for 1 individual that was not detected by the Authority’s internal controls. In addition, there was no review of any of the rent calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 participants were selected for testing. 1 out of the 60 tenant files had an incorrect rent calculation.
Effect – Failure to implement and maintain a proper control process could result in incorrect calculations of income, which could cause errors in eligibility determinations.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should implement controls to ensure eligibility requirements are being followed and that there is a review of tenant eligibility calculations by another individual.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Special Tests and Provisions: Project‐Based Budgeting and Accounting
Material Weakness in Internal Control over Compliance
Criteria – PHAs who have implemented asset management are to develop and maintain a system of budgeting and accounting for each project in a manner that allows for analysis of actual revenues and expenses associated with each property (24 CFR section 990.280(a)).
Condition – During our testing, we identified several errors in how expenses were being charged and or allocated to the projects. In addition, there was insufficient documentation supporting how allocation methods were determined and there was no review of the allocation calculations by another individual.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 12 out of the 60 expenditures utilized an allocation method that was incorrect or lacked sufficient documentation on how the allocation method was determined.
Effect – Failure to implement and maintain a proper control process could result in the misallocation of costs to a project or the program.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should ensure that all allocation methods are reviewed and adjusted regularly for changes within the program. Additionally, a control process should be implemented to review the application of allocation methods and their reasonableness.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.850
Public and Indian Housing
Applicable Federal Award Number and Year – Public and Indian Housing ‐ 2021
Procurement, Suspension and Debarment
Significant Deficiency in Internal Control over Compliance
Criteria – Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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.
Condition – During our testing, we observed that the Authority had not retained documentation that they had performed a search for suspension and debarment. Upon our search, none of the vendors were suspended or debarred.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 60 expenditures were selected for testing. 60 out of the 60 transactions did not have proper documentation that the vendor was not suspended or disbarred.
Effect – Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had performed a search for suspension and debarment.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain documentation showing they performed a search for suspension and debarment and proper research for sole source determinations.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Cash Management
Material Weakness in Internal Control over Compliance
Criteria – The Authority is to maintain supporting documentation for the reimbursement of costs incurred prior to the drawdown of program funds.
Condition – During out testing, we identified differences in the amounts drawn down for the Capital Fund program and the amounts recorded in the general ledger, resulting in material proposed audit adjustments. In addition, there was no review by another individual prior to the drawdown of funds.
Questioned Costs – None Reported.
Context/Sampling – Not Applicable.
Effect – Insufficient documentation was maintained and there was no review in place, which resulted in funds being inaccurately recorded in the accounting system.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain supporting documentation for the amounts drawn down and ensure the amounts are properly recorded. In addition, we recommend that another individual perform a review prior to the funds being drawn down.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Procurement, Suspension and Debarment
Significant Deficiency in Internal Control over Compliance
Criteria – Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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.
Condition – During our testing of suspension and debarment, we observed that the Authority had not retained documentation that they had performed a search for suspension and debarment. Upon our search, none of the vendors were suspended or debarred.
Questioned Costs – None Reported.
Context/Sampling – A non‐statistical sample of 8 expenditures were selected for testing. 8 out of the 8 transactions did not have proper documentation that the vendor was not suspended or disbarred.
Effect – Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had performed a search for suspension and debarment.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should maintain documentation showing they performed a search for suspension and debarment.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Special Tests and Provisions – Capital Funds for Operating Costs
Significant Deficiency in Internal Control over Compliance
Criteria – A complete system of internal control contemplates for the development of a process to track and monitor the obligation and expenditure of program funds to ensure they are within program guidelines and requirements.
Condition – During our testing it was determined there was no consistent, documented process to ensure the timely obligation and expenditure of program funds to remain in compliance.
Questioned Costs – None Reported.
Context/Sampling – Not Applicable.
Effect – Failure to implement and maintain a proper control process could result in failure to meet the obligation and expenditure requirements of the program, resulting in the loss of funding.
Cause – Due to a lack of oversight, the Authority did not retain documentation that they had monitored the various program requirements to ensure compliance.
Repeat Finding from Prior Year – Yes.
Recommendation – The Authority should develop a process and maintain documentation showing they are consistently monitoring the obligation and expenditure requirements of the program.
Views of Responsible Officials – Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.872
Capital Fund Program
Applicable Federal Award Number and Year – Capital Fund Program ‐ 2021
Special Tests and Provisions – Environmental Reviews
Significant Deficiency in Internal Control over Compliance
Criteria – The Program requires an environmental review must be completed every 5 years for any project or activities before a PHA may acquire, rehabilitate, convert, lease, repair or construct property, or commit HUD or local funds at an assisted or to‐be‐assisted site.
Condition – The Authority has not had an environmental review completed for 3 of the 4 projects.
Questioned Costs – None Reported.
Context/Sampling – N/A
Effect – Failure to implement and maintain a proper control process resulted in environmental reviews not being completed on 3 of the 4 projects.
Cause – The Authority has experienced significant staff turnover and the Authority’s controls are currently not adequately designed and operating.
Repeat Finding from Prior Year – No.
Recommendation – The Authority should implement controls to ensure that an environmental review is completed for all projects at least every 5 years.
Views of Responsible Officials – Management agrees with the finding.