Audit 316970

Finding 2023-001- Public Housing Tenant Files - Ellglblllty- Internal Control over Tenant Files - Noncompllance and Significant Deficiency Low Income Public Housing - ALN 14.850 Condition & Cause: We randomly selected forty-six (46) tenant files for review. We noted sixteen (16) tenant files were out of compliance in one or more categories. Of these, five (5) files, or 10.8%, were impacted by errors related to adjusted annual income. We were able to extrapolate identified misstatements of rental charges and found the potential misstatement to represent 0.48% of program rental revenue, which is immaterial to the financial statements. In our review, we noted: • Twelve (12) files for which the reexamination EIV was either missing or pulled at least a couple of months after the effective date; • Three (3) instances of miscalculations of annual income; • Two (2) instances of improper or missing income verification; • Two (2) instances of improper deductions; and • One (1) annual reexamination that was conducted more than three months late. We noted that the Agency has experienced difficulty in hiring and retaining quality staff. The Public Housing department was understaffed for a large portion of the audit period under review. However, we noted that the 10.8% income-related error rate in the current audit period is down from 22% reported in the prior audit period. Criteria: The Code of Federal regulations, the Housing Authority's ACOP, and specific HUD guidelines in documenting and maintaining the Public Housing tenant files. Effect: The failure to properly verify and calculate the dwelling rent charged to a resident can result in a misstatement of operating income and corresponding operating subsidy earned by the Housing Authority. Additionally, rental charge misstatements may cause an undue financlal burden on the participant, which is incongruent with the mission of the Agency. Recommendation: We note that the Authority has already implemented internal quality control processes for most actions affecting the tenant files. We recommend continuing monitoring implemented internal controls for improvement and, if necessary, installing additional controls or staff training as needed to meet compliance standards. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Viewsof responsible officials: The PHA agrees withtheresults of the audit and recommendations.

Finding 2023-002 - Housing Choice Voucher Tenant Flies - Eligibility - Internal Control over Tenant Files - Noncompliance & Significant Deficiency Housing Choice Voucher Program -ALN 14.871 Condition & Cause: We randomly selected one hundred ten (110) tenant files for review. We noted forty-five (45) tenant files were out of compliance in one or more categories. Of these, seven (7) files, or 6.3% of our sample, were impacted by errors related to adjusted annual income. We were able to extrapolate identified misstatements of HAP and found the potential misstatement to represent 0.19% of program I-IAP expense, which is immaterial to the financial statements. In our review, we noted: • Thirty-eight (38) annual reexaminations that were conducted more than three months late; • Four (4) instances of miscalculations of annual income; • Three (3) instances of missing or improper income verification; • One (1) instance of improper verification of deductions; and • One (1) file that was missing the action under review. We noted that the Agency has experienced difficulty in hiring and retaining quality staff. The Housing Choice Voucher department had many staff vacancies, including the position of HCV Director, during the audit period under review. Criteria: The Code of Federal regulations, the Housing Authority Administrative Plan and specific HUO guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Failure to complete timely reexaminations or properly verify and calculate annual income can result in a misstatement of HAP expense leading to improper funding for the HCV program. Misstatements of HAP may cause an undue financial burden to the participant, which is incongruent with the mission of the Agency. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We note that the Authority has already implemented internal quality control processes for most actions affecting the tenant files. We recommend continuing monitoring implemented internal controls for improvement and, if necessary, installing additional controls or staff training as needed to meet compliance standards. Questioned Co5ts: None Repeat Finding: No Was sampling statistically valid? Yes Viewsof responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2023-001- Public Housing Tenant Files - Ellglblllty- Internal Control over Tenant Files - Noncompllance and Significant Deficiency Low Income Public Housing - ALN 14.850 Condition & Cause: We randomly selected forty-six (46) tenant files for review. We noted sixteen (16) tenant files were out of compliance in one or more categories. Of these, five (5) files, or 10.8%, were impacted by errors related to adjusted annual income. We were able to extrapolate identified misstatements of rental charges and found the potential misstatement to represent 0.48% of program rental revenue, which is immaterial to the financial statements. In our review, we noted: • Twelve (12) files for which the reexamination EIV was either missing or pulled at least a couple of months after the effective date; • Three (3) instances of miscalculations of annual income; • Two (2) instances of improper or missing income verification; • Two (2) instances of improper deductions; and • One (1) annual reexamination that was conducted more than three months late. We noted that the Agency has experienced difficulty in hiring and retaining quality staff. The Public Housing department was understaffed for a large portion of the audit period under review. However, we noted that the 10.8% income-related error rate in the current audit period is down from 22% reported in the prior audit period. Criteria: The Code of Federal regulations, the Housing Authority's ACOP, and specific HUD guidelines in documenting and maintaining the Public Housing tenant files. Effect: The failure to properly verify and calculate the dwelling rent charged to a resident can result in a misstatement of operating income and corresponding operating subsidy earned by the Housing Authority. Additionally, rental charge misstatements may cause an undue financlal burden on the participant, which is incongruent with the mission of the Agency. Recommendation: We note that the Authority has already implemented internal quality control processes for most actions affecting the tenant files. We recommend continuing monitoring implemented internal controls for improvement and, if necessary, installing additional controls or staff training as needed to meet compliance standards. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Viewsof responsible officials: The PHA agrees withtheresults of the audit and recommendations.

Finding 2023-002 - Housing Choice Voucher Tenant Flies - Eligibility - Internal Control over Tenant Files - Noncompliance & Significant Deficiency Housing Choice Voucher Program -ALN 14.871 Condition & Cause: We randomly selected one hundred ten (110) tenant files for review. We noted forty-five (45) tenant files were out of compliance in one or more categories. Of these, seven (7) files, or 6.3% of our sample, were impacted by errors related to adjusted annual income. We were able to extrapolate identified misstatements of HAP and found the potential misstatement to represent 0.19% of program I-IAP expense, which is immaterial to the financial statements. In our review, we noted: • Thirty-eight (38) annual reexaminations that were conducted more than three months late; • Four (4) instances of miscalculations of annual income; • Three (3) instances of missing or improper income verification; • One (1) instance of improper verification of deductions; and • One (1) file that was missing the action under review. We noted that the Agency has experienced difficulty in hiring and retaining quality staff. The Housing Choice Voucher department had many staff vacancies, including the position of HCV Director, during the audit period under review. Criteria: The Code of Federal regulations, the Housing Authority Administrative Plan and specific HUO guidelines in documenting and maintaining Housing Choice Voucher tenant files. Effect: Failure to complete timely reexaminations or properly verify and calculate annual income can result in a misstatement of HAP expense leading to improper funding for the HCV program. Misstatements of HAP may cause an undue financial burden to the participant, which is incongruent with the mission of the Agency. Additionally, noncompliance can result in a decrease of vouchers or loss of program funding. Recommendation: We note that the Authority has already implemented internal quality control processes for most actions affecting the tenant files. We recommend continuing monitoring implemented internal controls for improvement and, if necessary, installing additional controls or staff training as needed to meet compliance standards. Questioned Co5ts: None Repeat Finding: No Was sampling statistically valid? Yes Viewsof responsible officials: The PHA agrees with the results of the audit and recommendations.