Audit 3185

Finding Number: 2021-005 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Special Test and Provisions, HQS Enforcement Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 982.404 provides that the owner must maintain the unit in accordance with HQS. If the owner fails to maintain the dwelling unit in accordance with Housing Quality Standards (HQS), the PHA must take prompt and vigorous action to enforce the owner obligations. PHA remedies for such breach of the HQS include termination, suspension or reduction of housing assistance payments and termination of the HAP contract. The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). The owner is not responsible for a breach of the HQS that is not caused by the owner, and for which the family is responsible (as provided in § 982.404(b) and § 982.551(c)). (However, the PHA may terminate assistance to a family because of HQS breach caused by the family.) The Authority did not have HQS re-inspections completed within 30 calendar days for HQS inspection failures for 55 percent of failures tested and did not formally approve extensions. Failure to complete timely re-inspections or approve extensions could result in dwellings not maintained in accordance with HQS. The Authority should complete re-inspections within the required time frame or approve extensions.

Finding Number: 2021-006 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Eligibility, Reporting, Special Test and Provisions, Housing Assistance Payments Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 24 CFR section 982.516(a) states the Public Housing Authority (PHA) must conduct a reexamination of family income and composition at least annually. Section 2 states the PHA must obtain and document in the tenant file third-party verification of the following factors or must document why third-party verification was not available: (i) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent. 24 CFR section 908 states the Public Housing Authority (PHA) is required to submit HUD-50058 form electronically to HUD each time the Public Housing Authority (PHA) completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR section 982.505(b) states the Public Housing Authority (PHA) shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The Authority input data into the HUD-50058 inaccurately for 3.3 percent of the tenant files tested for the Housing Choice Voucher program. This resulted in the data reported on HUD-50058 to be inaccurate and variances in the calculation of the Housing Assistance Payment. The Executive Director and Housing Choice Voucher employees should ensure all tenant files maintain the appropriate documentation to meet the requirements of income verification and housing assistance payments reporting.

Finding Number: 2021-007 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Reporting Special Tests & Provisions Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Material Weakness Sound accounting practices require that when designing the public office’s system of internal control and the specific control activities, management should ensure adequate security of assets and records, and verify the existence and valuation of assets and liabilities and periodically reconcile them to the accounting records. As noted in Finding 2021-004, the Authority was unable to provide audit evidence to support the completeness of the amounts reported on the financial statements, bank reconciliation differences, as well as certain transactions, including fraudulent transactions. Due to lack of audit evidence, the necessary adjustments to the financial statements for the issue identified in Finding 2021-004 were undeterminable and we were unable to express an opinion on the Authority’s accompanying financial statements or determine the completeness of the amounts reported on the Schedule of Expenditures of Federal Awards. As a result, we were also unable to obtain audit evidence supporting the completeness of the populations for testing the program compliance requirements, and unable to determine whether the Authority complied with the Activities Allowed or Unallowed, Allowable Cost / Cost Principles, Eligibility, Reporting or Special Tests and Provisions compliance requirements. Therefore, we have issued a disclaimer of opinion on the Housing Voucher Cluster program compliance. See Finding 2021-004 in Section 2 above. Government Auditing Standards also requires us to report this finding in this section of this Schedule.

Finding Number: 2021-005 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Special Test and Provisions, HQS Enforcement Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 982.404 provides that the owner must maintain the unit in accordance with HQS. If the owner fails to maintain the dwelling unit in accordance with Housing Quality Standards (HQS), the PHA must take prompt and vigorous action to enforce the owner obligations. PHA remedies for such breach of the HQS include termination, suspension or reduction of housing assistance payments and termination of the HAP contract. The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). The owner is not responsible for a breach of the HQS that is not caused by the owner, and for which the family is responsible (as provided in § 982.404(b) and § 982.551(c)). (However, the PHA may terminate assistance to a family because of HQS breach caused by the family.) The Authority did not have HQS re-inspections completed within 30 calendar days for HQS inspection failures for 55 percent of failures tested and did not formally approve extensions. Failure to complete timely re-inspections or approve extensions could result in dwellings not maintained in accordance with HQS. The Authority should complete re-inspections within the required time frame or approve extensions.

Finding Number: 2021-006 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Eligibility, Reporting, Special Test and Provisions, Housing Assistance Payments Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 24 CFR section 982.516(a) states the Public Housing Authority (PHA) must conduct a reexamination of family income and composition at least annually. Section 2 states the PHA must obtain and document in the tenant file third-party verification of the following factors or must document why third-party verification was not available: (i) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent. 24 CFR section 908 states the Public Housing Authority (PHA) is required to submit HUD-50058 form electronically to HUD each time the Public Housing Authority (PHA) completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR section 982.505(b) states the Public Housing Authority (PHA) shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The Authority input data into the HUD-50058 inaccurately for 3.3 percent of the tenant files tested for the Housing Choice Voucher program. This resulted in the data reported on HUD-50058 to be inaccurate and variances in the calculation of the Housing Assistance Payment. The Executive Director and Housing Choice Voucher employees should ensure all tenant files maintain the appropriate documentation to meet the requirements of income verification and housing assistance payments reporting.

Finding Number: 2021-007 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Reporting Special Tests & Provisions Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Material Weakness Sound accounting practices require that when designing the public office’s system of internal control and the specific control activities, management should ensure adequate security of assets and records, and verify the existence and valuation of assets and liabilities and periodically reconcile them to the accounting records. As noted in Finding 2021-004, the Authority was unable to provide audit evidence to support the completeness of the amounts reported on the financial statements, bank reconciliation differences, as well as certain transactions, including fraudulent transactions. Due to lack of audit evidence, the necessary adjustments to the financial statements for the issue identified in Finding 2021-004 were undeterminable and we were unable to express an opinion on the Authority’s accompanying financial statements or determine the completeness of the amounts reported on the Schedule of Expenditures of Federal Awards. As a result, we were also unable to obtain audit evidence supporting the completeness of the populations for testing the program compliance requirements, and unable to determine whether the Authority complied with the Activities Allowed or Unallowed, Allowable Cost / Cost Principles, Eligibility, Reporting or Special Tests and Provisions compliance requirements. Therefore, we have issued a disclaimer of opinion on the Housing Voucher Cluster program compliance. See Finding 2021-004 in Section 2 above. Government Auditing Standards also requires us to report this finding in this section of this Schedule.

Finding Number: 2021-005 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Special Test and Provisions, HQS Enforcement Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 982.404 provides that the owner must maintain the unit in accordance with HQS. If the owner fails to maintain the dwelling unit in accordance with Housing Quality Standards (HQS), the PHA must take prompt and vigorous action to enforce the owner obligations. PHA remedies for such breach of the HQS include termination, suspension or reduction of housing assistance payments and termination of the HAP contract. The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). The owner is not responsible for a breach of the HQS that is not caused by the owner, and for which the family is responsible (as provided in § 982.404(b) and § 982.551(c)). (However, the PHA may terminate assistance to a family because of HQS breach caused by the family.) The Authority did not have HQS re-inspections completed within 30 calendar days for HQS inspection failures for 55 percent of failures tested and did not formally approve extensions. Failure to complete timely re-inspections or approve extensions could result in dwellings not maintained in accordance with HQS. The Authority should complete re-inspections within the required time frame or approve extensions.

Finding Number: 2021-006 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Eligibility, Reporting, Special Test and Provisions, Housing Assistance Payments Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 24 CFR section 982.516(a) states the Public Housing Authority (PHA) must conduct a reexamination of family income and composition at least annually. Section 2 states the PHA must obtain and document in the tenant file third-party verification of the following factors or must document why third-party verification was not available: (i) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent. 24 CFR section 908 states the Public Housing Authority (PHA) is required to submit HUD-50058 form electronically to HUD each time the Public Housing Authority (PHA) completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR section 982.505(b) states the Public Housing Authority (PHA) shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The Authority input data into the HUD-50058 inaccurately for 3.3 percent of the tenant files tested for the Housing Choice Voucher program. This resulted in the data reported on HUD-50058 to be inaccurate and variances in the calculation of the Housing Assistance Payment. The Executive Director and Housing Choice Voucher employees should ensure all tenant files maintain the appropriate documentation to meet the requirements of income verification and housing assistance payments reporting.

Finding Number: 2021-007 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Reporting Special Tests & Provisions Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Material Weakness Sound accounting practices require that when designing the public office’s system of internal control and the specific control activities, management should ensure adequate security of assets and records, and verify the existence and valuation of assets and liabilities and periodically reconcile them to the accounting records. As noted in Finding 2021-004, the Authority was unable to provide audit evidence to support the completeness of the amounts reported on the financial statements, bank reconciliation differences, as well as certain transactions, including fraudulent transactions. Due to lack of audit evidence, the necessary adjustments to the financial statements for the issue identified in Finding 2021-004 were undeterminable and we were unable to express an opinion on the Authority’s accompanying financial statements or determine the completeness of the amounts reported on the Schedule of Expenditures of Federal Awards. As a result, we were also unable to obtain audit evidence supporting the completeness of the populations for testing the program compliance requirements, and unable to determine whether the Authority complied with the Activities Allowed or Unallowed, Allowable Cost / Cost Principles, Eligibility, Reporting or Special Tests and Provisions compliance requirements. Therefore, we have issued a disclaimer of opinion on the Housing Voucher Cluster program compliance. See Finding 2021-004 in Section 2 above. Government Auditing Standards also requires us to report this finding in this section of this Schedule.

Finding Number: 2021-005 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Special Test and Provisions, HQS Enforcement Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 982.404 provides that the owner must maintain the unit in accordance with HQS. If the owner fails to maintain the dwelling unit in accordance with Housing Quality Standards (HQS), the PHA must take prompt and vigorous action to enforce the owner obligations. PHA remedies for such breach of the HQS include termination, suspension or reduction of housing assistance payments and termination of the HAP contract. The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). The owner is not responsible for a breach of the HQS that is not caused by the owner, and for which the family is responsible (as provided in § 982.404(b) and § 982.551(c)). (However, the PHA may terminate assistance to a family because of HQS breach caused by the family.) The Authority did not have HQS re-inspections completed within 30 calendar days for HQS inspection failures for 55 percent of failures tested and did not formally approve extensions. Failure to complete timely re-inspections or approve extensions could result in dwellings not maintained in accordance with HQS. The Authority should complete re-inspections within the required time frame or approve extensions.

Finding Number: 2021-006 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Eligibility, Reporting, Special Test and Provisions, Housing Assistance Payments Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 24 CFR section 982.516(a) states the Public Housing Authority (PHA) must conduct a reexamination of family income and composition at least annually. Section 2 states the PHA must obtain and document in the tenant file third-party verification of the following factors or must document why third-party verification was not available: (i) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income- based rent. 24 CFR section 908 states the Public Housing Authority (PHA) is required to submit HUD-50058 form electronically to HUD each time the Public Housing Authority (PHA) completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. 24 CFR section 982.505(b) states the Public Housing Authority (PHA) shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The Authority input data into the HUD-50058 inaccurately for 3.3 percent of the tenant files tested for the Housing Choice Voucher program. This resulted in the data reported on HUD-50058 to be inaccurate and variances in the calculation of the Housing Assistance Payment. The Executive Director and Housing Choice Voucher employees should ensure all tenant files maintain the appropriate documentation to meet the requirements of income verification and housing assistance payments reporting.

Finding Number: 2021-007 Assistance Listing Number and Title: AL # 14.871 - Section 8 Housing Choice Vouchers/Housing Voucher Cluster Federal Award Identification Number / Year: 2021 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Reporting Special Tests & Provisions Pass-Through Entity: N/A Repeat Finding from Prior Audit? No Material Weakness Sound accounting practices require that when designing the public office’s system of internal control and the specific control activities, management should ensure adequate security of assets and records, and verify the existence and valuation of assets and liabilities and periodically reconcile them to the accounting records. As noted in Finding 2021-004, the Authority was unable to provide audit evidence to support the completeness of the amounts reported on the financial statements, bank reconciliation differences, as well as certain transactions, including fraudulent transactions. Due to lack of audit evidence, the necessary adjustments to the financial statements for the issue identified in Finding 2021-004 were undeterminable and we were unable to express an opinion on the Authority’s accompanying financial statements or determine the completeness of the amounts reported on the Schedule of Expenditures of Federal Awards. As a result, we were also unable to obtain audit evidence supporting the completeness of the populations for testing the program compliance requirements, and unable to determine whether the Authority complied with the Activities Allowed or Unallowed, Allowable Cost / Cost Principles, Eligibility, Reporting or Special Tests and Provisions compliance requirements. Therefore, we have issued a disclaimer of opinion on the Housing Voucher Cluster program compliance. See Finding 2021-004 in Section 2 above. Government Auditing Standards also requires us to report this finding in this section of this Schedule.