Audit 321234

Finding 2023-005 – Procurement – Lack of Support for Procurement of Vendor Noncompliance & Significant Deficiency – ALN 14.850 & 14.872 Criteria: Regulations at 2 CFR Part 200, Uniform Administrative Requirements, outline the procurement standards that are required for recipients of federal grant awards. The nonfederal entity must have and use documented procurement procedures, consistent with state, local, and tribunal laws and regulations and the standards of this section. The nonfederal entity must create and adhere to its local Procurement Policy which has been approved by its board of directors. Condition: We examined five (5) contracts for our tests of the internal controls related to the procurement of vendors. The Authority entered into the contract agreement 404-08-23-RFP with both Merit Construction and Hoagland Construction. We noted that the Authority conducted its procurement on the basis of evaluation in the form of an RFP and competitive proposal. We found a few deviations from expectations which are detailed below:  The Authority was unable to produce evaluations and scoring for Merit Construction. The Authority was also unable to produce documentation on why Merit Construction was selected for the job.  The Authority was unable to produce bid, performance, and payment bonding for Merit Construction Cause: The Authority has experienced significant staff turnover within the past year. It is possible that those items mentioned above were performed and completed, but the Authority is unable to demonstrate them to us. Effect: Noncompliance with local and federal procurement requirements can lead to findings and penalties related to funding. Recommendation: We recommend that the Authority conducts a review of active contracts to ensure that all information related to the procurement of vendors is maintained effectively per the local procurement policy. We also recommend that going forward the Authority monitor this process to ensure that these supporting files are evidenced and maintained.

Finding 2023-005 – Procurement – Lack of Support for Procurement of Vendor Noncompliance & Significant Deficiency – ALN 14.850 & 14.872 Criteria: Regulations at 2 CFR Part 200, Uniform Administrative Requirements, outline the procurement standards that are required for recipients of federal grant awards. The nonfederal entity must have and use documented procurement procedures, consistent with state, local, and tribunal laws and regulations and the standards of this section. The nonfederal entity must create and adhere to its local Procurement Policy which has been approved by its board of directors. Condition: We examined five (5) contracts for our tests of the internal controls related to the procurement of vendors. The Authority entered into the contract agreement 404-08-23-RFP with both Merit Construction and Hoagland Construction. We noted that the Authority conducted its procurement on the basis of evaluation in the form of an RFP and competitive proposal. We found a few deviations from expectations which are detailed below:  The Authority was unable to produce evaluations and scoring for Merit Construction. The Authority was also unable to produce documentation on why Merit Construction was selected for the job.  The Authority was unable to produce bid, performance, and payment bonding for Merit Construction Cause: The Authority has experienced significant staff turnover within the past year. It is possible that those items mentioned above were performed and completed, but the Authority is unable to demonstrate them to us. Effect: Noncompliance with local and federal procurement requirements can lead to findings and penalties related to funding. Recommendation: We recommend that the Authority conducts a review of active contracts to ensure that all information related to the procurement of vendors is maintained effectively per the local procurement policy. We also recommend that going forward the Authority monitor this process to ensure that these supporting files are evidenced and maintained.

Finding 2023-004 – Housing Choice Voucher Tenant Files – Rent Calculations Noncompliance & Significant Deficiency – ALN 14.871 Criteria: Part 24 of the Code of Federal Regulations, Section 982, and the Housing Choice Voucher Guidebook give the requirements and guidance for maintaining the tenant files. HUD requires that certain information be obtained from each resident to properly support the rental calculations and prescribes acceptable methods of tenant income calculation. Additionally, the Agency’s Administrative Plan provides guidance on the requirements of the tenant files and how they must be maintained. Condition and Cause: We reviewed one hundred (100) Housing Choice Voucher tenant files and noted errors as described below:  One instance of a 50058 form not in agreement with the HAP register  One instance of an annual reexamination conducted late  Two instances of unverified income  Five instances of a miscalculation of a residents’ income  One instance of deductions in a tenant file being incorrect In total the above deficiencies aggregate to a 10% error rate with 8% of the errors being attributed to resident income calculations. Effect: Improper calculation of tenant rental charges can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine whether there are additional deficiencies. We also recommend that the Authority implement a quality control review to adequately monitor compliance with regulations pertaining to the maintenance of tenant files, which was underway with Nan McKay Associates, while the audit was taking place.

Finding 2023-005 – Procurement – Lack of Support for Procurement of Vendor Noncompliance & Significant Deficiency – ALN 14.850 & 14.872 Criteria: Regulations at 2 CFR Part 200, Uniform Administrative Requirements, outline the procurement standards that are required for recipients of federal grant awards. The nonfederal entity must have and use documented procurement procedures, consistent with state, local, and tribunal laws and regulations and the standards of this section. The nonfederal entity must create and adhere to its local Procurement Policy which has been approved by its board of directors. Condition: We examined five (5) contracts for our tests of the internal controls related to the procurement of vendors. The Authority entered into the contract agreement 404-08-23-RFP with both Merit Construction and Hoagland Construction. We noted that the Authority conducted its procurement on the basis of evaluation in the form of an RFP and competitive proposal. We found a few deviations from expectations which are detailed below:  The Authority was unable to produce evaluations and scoring for Merit Construction. The Authority was also unable to produce documentation on why Merit Construction was selected for the job.  The Authority was unable to produce bid, performance, and payment bonding for Merit Construction Cause: The Authority has experienced significant staff turnover within the past year. It is possible that those items mentioned above were performed and completed, but the Authority is unable to demonstrate them to us. Effect: Noncompliance with local and federal procurement requirements can lead to findings and penalties related to funding. Recommendation: We recommend that the Authority conducts a review of active contracts to ensure that all information related to the procurement of vendors is maintained effectively per the local procurement policy. We also recommend that going forward the Authority monitor this process to ensure that these supporting files are evidenced and maintained.

Finding 2023-005 – Procurement – Lack of Support for Procurement of Vendor Noncompliance & Significant Deficiency – ALN 14.850 & 14.872 Criteria: Regulations at 2 CFR Part 200, Uniform Administrative Requirements, outline the procurement standards that are required for recipients of federal grant awards. The nonfederal entity must have and use documented procurement procedures, consistent with state, local, and tribunal laws and regulations and the standards of this section. The nonfederal entity must create and adhere to its local Procurement Policy which has been approved by its board of directors. Condition: We examined five (5) contracts for our tests of the internal controls related to the procurement of vendors. The Authority entered into the contract agreement 404-08-23-RFP with both Merit Construction and Hoagland Construction. We noted that the Authority conducted its procurement on the basis of evaluation in the form of an RFP and competitive proposal. We found a few deviations from expectations which are detailed below:  The Authority was unable to produce evaluations and scoring for Merit Construction. The Authority was also unable to produce documentation on why Merit Construction was selected for the job.  The Authority was unable to produce bid, performance, and payment bonding for Merit Construction Cause: The Authority has experienced significant staff turnover within the past year. It is possible that those items mentioned above were performed and completed, but the Authority is unable to demonstrate them to us. Effect: Noncompliance with local and federal procurement requirements can lead to findings and penalties related to funding. Recommendation: We recommend that the Authority conducts a review of active contracts to ensure that all information related to the procurement of vendors is maintained effectively per the local procurement policy. We also recommend that going forward the Authority monitor this process to ensure that these supporting files are evidenced and maintained.

Finding 2023-004 – Housing Choice Voucher Tenant Files – Rent Calculations Noncompliance & Significant Deficiency – ALN 14.871 Criteria: Part 24 of the Code of Federal Regulations, Section 982, and the Housing Choice Voucher Guidebook give the requirements and guidance for maintaining the tenant files. HUD requires that certain information be obtained from each resident to properly support the rental calculations and prescribes acceptable methods of tenant income calculation. Additionally, the Agency’s Administrative Plan provides guidance on the requirements of the tenant files and how they must be maintained. Condition and Cause: We reviewed one hundred (100) Housing Choice Voucher tenant files and noted errors as described below:  One instance of a 50058 form not in agreement with the HAP register  One instance of an annual reexamination conducted late  Two instances of unverified income  Five instances of a miscalculation of a residents’ income  One instance of deductions in a tenant file being incorrect In total the above deficiencies aggregate to a 10% error rate with 8% of the errors being attributed to resident income calculations. Effect: Improper calculation of tenant rental charges can result in misstatement of the financial statements, improper calculation of HAP subsidy, and noncompliance with Federal provisions governing the Housing Choice Voucher program. Recommendation: We recommend that the Authority conduct a file audit of existing tenants to determine whether there are additional deficiencies. We also recommend that the Authority implement a quality control review to adequately monitor compliance with regulations pertaining to the maintenance of tenant files, which was underway with Nan McKay Associates, while the audit was taking place.