Audit 304992

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority must reexamine family income at least once every 12 months and obtain and document third party verification (24 CFR section 982.516). Condition We tested compliance with the Authority’s eligibility in 40 tenant files and found that one tenant did not have a reexamination of all income done within the 12 months and no third party verification was performed on that income. We also noted one tenant did not have a signed lease agreement within the file. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for eligibility requirements. Effect HAP payments could have been paid to a tenant who was not eligible to receive the payments. Cause The Authority failed to reexamine family income every 12 months and obtain third party verification for all income. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all necessary procedures have been performed and appropriate documents are included. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financial statements within 9 months of year-end. Condition The Authority’s December 31, 2021 audited financial statements were not filed with the Federal Audit Clearinghouse within 9 months of the Authority’s year-end. Questioned Costs None Context N/A Effect The Authority is not in compliance with Uniform Guidance requirements. Cause The financial statements were not completed within the 9-month window which delayed the submission to the Federal Audit Clearinghouse. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority ensures reconciliations are prepared in a timely manner to allow for an efficient audit process. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and found that three tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness requirements. Effect HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition We tested compliance with the Authority’s HQS Enforcement on 3 failed inspections and found that one failed inspection was not re-inspected for corrections timely and HAP payment was not abated. The Authority performed a re-inspection and issued a pass once noted by the auditors. Questioned Costs None Context We reviewed a sample of 3 of the Authority’s 21 failed inspections to note a re-inspection and subsequent pass. Effect Tenants could be living in a unit that is not fit for living, or not up to standard with the lease agreement terms. Cause The failed inspection was not followed up on within a reasonable time to ensure that the failed items were corrected. Repeat Finding Not a repeat finding. Recommendation We recommend implementing a review process that occurs within the required timeframe for inspections to be followed up by to ensure the failed inspections are appropriately taken care of. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority must reexamine family income at least once every 12 months and obtain and document third party verification (24 CFR section 982.516). Condition We tested compliance with the Authority’s eligibility in 40 tenant files and found that one tenant did not have a reexamination of all income done within the 12 months and no third party verification was performed on that income. We also noted one tenant did not have a signed lease agreement within the file. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for eligibility requirements. Effect HAP payments could have been paid to a tenant who was not eligible to receive the payments. Cause The Authority failed to reexamine family income every 12 months and obtain third party verification for all income. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all necessary procedures have been performed and appropriate documents are included. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financial statements within 9 months of year-end. Condition The Authority’s December 31, 2021 audited financial statements were not filed with the Federal Audit Clearinghouse within 9 months of the Authority’s year-end. Questioned Costs None Context N/A Effect The Authority is not in compliance with Uniform Guidance requirements. Cause The financial statements were not completed within the 9-month window which delayed the submission to the Federal Audit Clearinghouse. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority ensures reconciliations are prepared in a timely manner to allow for an efficient audit process. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and found that three tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness requirements. Effect HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition We tested compliance with the Authority’s HQS Enforcement on 3 failed inspections and found that one failed inspection was not re-inspected for corrections timely and HAP payment was not abated. The Authority performed a re-inspection and issued a pass once noted by the auditors. Questioned Costs None Context We reviewed a sample of 3 of the Authority’s 21 failed inspections to note a re-inspection and subsequent pass. Effect Tenants could be living in a unit that is not fit for living, or not up to standard with the lease agreement terms. Cause The failed inspection was not followed up on within a reasonable time to ensure that the failed items were corrected. Repeat Finding Not a repeat finding. Recommendation We recommend implementing a review process that occurs within the required timeframe for inspections to be followed up by to ensure the failed inspections are appropriately taken care of. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority must reexamine family income at least once every 12 months and obtain and document third party verification (24 CFR section 982.516). Condition We tested compliance with the Authority’s eligibility in 40 tenant files and found that one tenant did not have a reexamination of all income done within the 12 months and no third party verification was performed on that income. We also noted one tenant did not have a signed lease agreement within the file. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for eligibility requirements. Effect HAP payments could have been paid to a tenant who was not eligible to receive the payments. Cause The Authority failed to reexamine family income every 12 months and obtain third party verification for all income. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all necessary procedures have been performed and appropriate documents are included. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financial statements within 9 months of year-end. Condition The Authority’s December 31, 2021 audited financial statements were not filed with the Federal Audit Clearinghouse within 9 months of the Authority’s year-end. Questioned Costs None Context N/A Effect The Authority is not in compliance with Uniform Guidance requirements. Cause The financial statements were not completed within the 9-month window which delayed the submission to the Federal Audit Clearinghouse. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority ensures reconciliations are prepared in a timely manner to allow for an efficient audit process. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and found that three tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness requirements. Effect HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition We tested compliance with the Authority’s HQS Enforcement on 3 failed inspections and found that one failed inspection was not re-inspected for corrections timely and HAP payment was not abated. The Authority performed a re-inspection and issued a pass once noted by the auditors. Questioned Costs None Context We reviewed a sample of 3 of the Authority’s 21 failed inspections to note a re-inspection and subsequent pass. Effect Tenants could be living in a unit that is not fit for living, or not up to standard with the lease agreement terms. Cause The failed inspection was not followed up on within a reasonable time to ensure that the failed items were corrected. Repeat Finding Not a repeat finding. Recommendation We recommend implementing a review process that occurs within the required timeframe for inspections to be followed up by to ensure the failed inspections are appropriately taken care of. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority must reexamine family income at least once every 12 months and obtain and document third party verification (24 CFR section 982.516). Condition We tested compliance with the Authority’s eligibility in 40 tenant files and found that one tenant did not have a reexamination of all income done within the 12 months and no third party verification was performed on that income. We also noted one tenant did not have a signed lease agreement within the file. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for eligibility requirements. Effect HAP payments could have been paid to a tenant who was not eligible to receive the payments. Cause The Authority failed to reexamine family income every 12 months and obtain third party verification for all income. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all necessary procedures have been performed and appropriate documents are included. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financial statements within 9 months of year-end. Condition The Authority’s December 31, 2021 audited financial statements were not filed with the Federal Audit Clearinghouse within 9 months of the Authority’s year-end. Questioned Costs None Context N/A Effect The Authority is not in compliance with Uniform Guidance requirements. Cause The financial statements were not completed within the 9-month window which delayed the submission to the Federal Audit Clearinghouse. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority ensures reconciliations are prepared in a timely manner to allow for an efficient audit process. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and found that three tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness requirements. Effect HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition We tested compliance with the Authority’s HQS Enforcement on 3 failed inspections and found that one failed inspection was not re-inspected for corrections timely and HAP payment was not abated. The Authority performed a re-inspection and issued a pass once noted by the auditors. Questioned Costs None Context We reviewed a sample of 3 of the Authority’s 21 failed inspections to note a re-inspection and subsequent pass. Effect Tenants could be living in a unit that is not fit for living, or not up to standard with the lease agreement terms. Cause The failed inspection was not followed up on within a reasonable time to ensure that the failed items were corrected. Repeat Finding Not a repeat finding. Recommendation We recommend implementing a review process that occurs within the required timeframe for inspections to be followed up by to ensure the failed inspections are appropriately taken care of. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority must reexamine family income at least once every 12 months and obtain and document third party verification (24 CFR section 982.516). Condition We tested compliance with the Authority’s eligibility in 40 tenant files and found that one tenant did not have a reexamination of all income done within the 12 months and no third party verification was performed on that income. We also noted one tenant did not have a signed lease agreement within the file. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for eligibility requirements. Effect HAP payments could have been paid to a tenant who was not eligible to receive the payments. Cause The Authority failed to reexamine family income every 12 months and obtain third party verification for all income. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all necessary procedures have been performed and appropriate documents are included. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financial statements within 9 months of year-end. Condition The Authority’s December 31, 2021 audited financial statements were not filed with the Federal Audit Clearinghouse within 9 months of the Authority’s year-end. Questioned Costs None Context N/A Effect The Authority is not in compliance with Uniform Guidance requirements. Cause The financial statements were not completed within the 9-month window which delayed the submission to the Federal Audit Clearinghouse. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority ensures reconciliations are prepared in a timely manner to allow for an efficient audit process. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and found that three tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness requirements. Effect HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition We tested compliance with the Authority’s HQS Enforcement on 3 failed inspections and found that one failed inspection was not re-inspected for corrections timely and HAP payment was not abated. The Authority performed a re-inspection and issued a pass once noted by the auditors. Questioned Costs None Context We reviewed a sample of 3 of the Authority’s 21 failed inspections to note a re-inspection and subsequent pass. Effect Tenants could be living in a unit that is not fit for living, or not up to standard with the lease agreement terms. Cause The failed inspection was not followed up on within a reasonable time to ensure that the failed items were corrected. Repeat Finding Not a repeat finding. Recommendation We recommend implementing a review process that occurs within the required timeframe for inspections to be followed up by to ensure the failed inspections are appropriately taken care of. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority must reexamine family income at least once every 12 months and obtain and document third party verification (24 CFR section 982.516). Condition We tested compliance with the Authority’s eligibility in 40 tenant files and found that one tenant did not have a reexamination of all income done within the 12 months and no third party verification was performed on that income. We also noted one tenant did not have a signed lease agreement within the file. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for eligibility requirements. Effect HAP payments could have been paid to a tenant who was not eligible to receive the payments. Cause The Authority failed to reexamine family income every 12 months and obtain third party verification for all income. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all necessary procedures have been performed and appropriate documents are included. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financial statements within 9 months of year-end. Condition The Authority’s December 31, 2021 audited financial statements were not filed with the Federal Audit Clearinghouse within 9 months of the Authority’s year-end. Questioned Costs None Context N/A Effect The Authority is not in compliance with Uniform Guidance requirements. Cause The financial statements were not completed within the 9-month window which delayed the submission to the Federal Audit Clearinghouse. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority ensures reconciliations are prepared in a timely manner to allow for an efficient audit process. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition We tested compliance with the Authority’s rent reasonableness forms in 40 tenant files and found that three tenants did not have a rent reasonableness form for the current cost of rent. The rent was deemed reasonable by the Authority once noted by the auditors. Questioned Costs None Context We reviewed a sample of 40 of the Authority’s 436 tenant files for rent reasonableness requirements. Effect HAP payments could have been paid to a tenant where rent was not considered reasonable. Cause Upon change in rent or move-in to a new property during the term of the HAP contracts, the tenant files did not contain forms comparing the rent of like-kind units. Repeat Finding Not a repeat finding. Recommendation We recommend there be a second party review of the file to ensure all appropriate documents are included. Views of Responsible Officials The Authority will have a checklist on annual certifications to ensure all appropriate documents are included in the file.

Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Significant Deficiency Criteria The Authority 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. If the owner does not correct the cited HQS deficiencies within the specified correction period, the Authority must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition We tested compliance with the Authority’s HQS Enforcement on 3 failed inspections and found that one failed inspection was not re-inspected for corrections timely and HAP payment was not abated. The Authority performed a re-inspection and issued a pass once noted by the auditors. Questioned Costs None Context We reviewed a sample of 3 of the Authority’s 21 failed inspections to note a re-inspection and subsequent pass. Effect Tenants could be living in a unit that is not fit for living, or not up to standard with the lease agreement terms. Cause The failed inspection was not followed up on within a reasonable time to ensure that the failed items were corrected. Repeat Finding Not a repeat finding. Recommendation We recommend implementing a review process that occurs within the required timeframe for inspections to be followed up by to ensure the failed inspections are appropriately taken care of. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.