FAC Explorer

Audit 321980

FY End
2023-12-31
Total Expended
$4.06B
Findings
6
Programs
15
Organization: New York City Housing Authority (NY)
Year: 2023 Accepted: 2024-09-27
Auditor: Deloitte & Touche LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
499186 2023-001 Material Weakness Yes N
499187 2023-002 - Yes E
499188 2023-003 - - I
1075628 2023-001 Material Weakness Yes N
1075629 2023-002 - Yes E
1075630 2023-003 - - I

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $1.60B - 0
14.850 Public and Indian Housing $1.32B Yes 3
14.872 Public Housing Capital Fund $782.38M Yes 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $158.10M - 0
14.U01 Covid-19-Ehv-Emergency Housing Vouchers $100.83M - 0
14.218 Community Development Block Grants/entitlement Grants $44.09M Yes 0
97.036 Covid-19-Disaster Grants - Public Assistance (presidentially Declared Disasters) $41.44M - 0
14.879 Mainstream Vouchers $3.84M - 0
14.888 Lead-Based Paint Capital Fund Program $3.02M - 0
14.269 Hurricane Sandy Community Development Block Grant Disaster Recovery Grants (cdbg-Dr) $2.94M - 0
14.870 Resident Opportunity and Supportive Services - Service Coordinators $173,219 - 0
97.047 Bric: Building Resilient Infrastructure and Communities $162,522 - 0
14.896 Family Self-Sufficiency Program $103,959 - 0
97.045 Cooperating Technical Partners $12,000 - 0
97.039 Hazard Mitigation Grant $-1.72M - 0

Contacts

Name Title Type
UEHJK3XLHM58 Jeffrey Lesnoy Auditee
9294465771 Jill Strohmeyer Auditor
No contacts on file

Notes to SEFA

Title: 1.           BASIS OF ACCOUNTING Accounting Policies: The accompanying schedule of expenditures of federal awards (the “schedule”) of the Authority is presented on the accrual basis of accounting.. The expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10 percent de minimis indirect cost rate. Reporting Entity—The New York City Housing Authority (“Authority”) is a component unit of The City of New York (“The City”), based upon criteria for defining the reporting entity as identified and described in the Government Accounting Standards Board’s (“GASB”) Codification of Governmental Accounting and Financial Reporting Standard, Sections 2100 and 2600. The accompanying schedule of expenditures of federal awards (the “schedule”) of the Authority is presented on the accrual basis of accounting. The Authority’s financial statements are prepared in accordance with generally accepted accounting principles as prescribed by the GASB, using the economic resources measurement focus and the accrual basis of accounting wherein revenues are recognized when earned, and expenses are recognized when the liability is incurred. The Authority’s operations include one blended component unit which is included in the Authority’s basic financial statements, in compliance with GASB 61 The Financial Reporting Entity: Omnibus – an amendment of GASB Statement No. 14 and No. 34. This is legally separate entity with the same governing body as the Authority for which the Authority has operational responsibility and are controlled by the Authority. There is a financial benefit/burden relationship between the Authority and the component unit since the Authority is responsible for providing operating and capital subsidies to the component unit. The blended component unit is the: • NYCHA Public Housing Preservation I, LLC The Authority receives federal financial assistance from U.S. Department of Housing and Urban Development (“HUD”) in the form of annual contributions for debt service and operating subsidies for public housing developments, as well as rent subsidies for the Section 8 Housing Choice Vouchers program. In addition, assistance is also received under HUD’s Public and Indian Housing Program, Capital Fund Program, and other programs. BASIS OF PRESENTATION- The accompanying schedule of expenditures of federal awards (the “schedule”) includes the federal award activity of the Authority under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Because the schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Authority. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- The expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement
Title: 2. INDIRECT COST RATE Accounting Policies: The accompanying schedule of expenditures of federal awards (the “schedule”) of the Authority is presented on the accrual basis of accounting.. The expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10 percent de minimis indirect cost rate. The Authority has not elected to use the 10 percent de minimis indirect cost rate.
Title: 3. RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS Accounting Policies: The accompanying schedule of expenditures of federal awards (the “schedule”) of the Authority is presented on the accrual basis of accounting.. The expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10 percent de minimis indirect cost rate. The regulations and guidelines governing the preparation of federal and state financial reports vary by state and federal agency and among programs administered by the same agency. Accordingly, the amounts reported in the federal and state financial reports do not necessarily agree with the amounts reported in the accompany schedule which is prepared as explained in Note 1 above.
Title: 4.             CAPITAL FUND PROGRAM MANAGEMENT FEES Accounting Policies: The accompanying schedule of expenditures of federal awards (the “schedule”) of the Authority is presented on the accrual basis of accounting.. The expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10 percent de minimis indirect cost rate. The U.S. Department of Housing and Urban Development (“HUD”) requires that a fee- for- service approach be implemented for the Public Housing Program. HUD recognizes that the Central Office Cost Center (“COCC”) will perform management and owner functions related to long-term capital planning, budgeting, oversight, monitoring, and reporting of the Capital Fund Program. Capital Fund Program management fees has been generated from the Assets Management projects (“AMP”) to fund costs incurred by the COCC for these functions. The Capital Fund Program management fee covers costs associated with the COCC's oversight and management of the Capital Fund Program. These costs include duties related to general capital planning, preparation of the Annual Plan, preparation of reports, drawing of funds, budgeting, accounting, and procurement of construction and other miscellaneous contracts. This fee is not intended to cover costs associated with the physical needs assessments, and the construction supervisory and inspection functions, since these are considered a front-line cost of the project. The Authority charges a management fee of up to 10 percent of the Capital Fund Program formula grant amount. The Capital Fund Program management fee is considered part of the Capital Fund Program Budget line item, Administration, subject to the regulatory limitation of 10 percent of the Capital Fund grant
Title: 5. PUBLIC HOUSING CAPITAL FUND PROGRAMS Accounting Policies: The accompanying schedule of expenditures of federal awards (the “schedule”) of the Authority is presented on the accrual basis of accounting.. The expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The Authority has not elected to use the 10 percent de minimis indirect cost rate. Federal legislation known as the “Quality Housing and Work Responsibility Act of 1998” created the Public Housing Capital Fund Program (“CFP”). HUD utilizes this program to allocate capital funds to Public Housing Authorities (“PHAs”) since 2000, when it replaced the Comprehensive Grant Program (“Comp Grant”). Each year, after HUD calculates a CFP formula allocation for each PHA, the Authority enters into a grant agreement, known as a “Capital Fund Amendment to the Basic Annual Contribution Contract.” Upon execution of the agreement, the PHAs are required to obligate 90 percent of that particular year’s CFP grant within 2 years and fully expend and draw down on the funds within 4 years. Capital Fund Program expenditures during the Year ended December 31, 2023 were as follows: (see Note 5 in the New York City Housing Authority Single Audit report)

Finding Details

Finding 2023-001
FINDING # 2023-001 SPECIAL TESTS AND PROVISIONS- ENVIRONMENTAL CONTAMINANTS TESTING AND REMEDIATION – MATERIAL WEAKNESS PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA Special Tests and Provisions - Environmental Contaminants Testing and Remediation As stated in the May 2023 Compliance Supplement, Public Housing must be decent, safe, sanitary, and in good repair. Public Housing Authority’s (PHA) must maintain such housing in a manner that meets the physical condition standards set forth in 24 CFR section 5.703 in order to be considered decent, safe, sanitary, and in good repair. Those standards address the major areas of the public housing: the site; the building exterior; the building systems; the dwelling units; the common areas; and health and safety considerations. Health and safety considerations require that all areas and components of the housing must be free of health and safety hazards. These areas include, but are not limited to, air quality, electrical hazards, elevators, emergency/fire exits, flammable materials, garbage and debris, handrail hazards, infestation, and lead-based paint. The housing must have no evidence of infestation by rats, mice, or other vermin, or of garbage and debris. The housing must have no evidence of electrical hazards, natural hazards, or fire hazards. The dwelling units and common areas must have proper ventilation and be free of mold, odor (e.g., propane, natural gas, methane gas), or other indoor air hazards such as radon. The housing must comply with all requirements related to the evaluation and reduction of lead-based paint hazards and have available proper certifications of such (see 24 CFR Part 35). For the period under audit, the PHA is required to test for and remediate environmental contaminates including but not limited to lead-based paint, radon gas, and mold to ensure that public housing met the physical condition standards for health and safety considerations set forth in 24 CFR section 5.703. 2. CONDITION/PERSPECTIVE The New York City Housing Authority (the “Authority”) performs environmental contaminates testing and remediation including but not limited to Lead-based paint, Mold, Pest Control, Elevators, Heating and Annual Apartment Inspections. To track compliance with the Agreement executed on January 31, 2019 by and among the Authority, the U.S. Department of Housing and Urban Development (“HUD”) and the U.S. Attorney’s Office for the Southern District of New York (SDNY) and The City Of New York (the “HUD Agreement”), the Authority maintains monthly inspection reports for the various inspections performed and provides that information to HUD, the SDNY and the Federal Monitor appointed under the HUD Agreement. Deloitte obtained the bi-annual lead-based paint compliance reports from the Authority and for the Period from June 16, 2023 through December 15, 2023 and December 16, 2022 through July 15, 2023, we read extermination, heat outage, mold inspections, annual apartment inspections, and elevator outage reports for the months of February 2023; April 2023; July 2023; September 2023 and November 2023. During our audit, we noted that the Authority did not complete all corrective actions in the 2023 audit period and is in the process of addressing these issues. 3. CAUSE Some environmental contaminates were not remediated in the 2023 audit period. 4. EFFECT The U.S. Department of Housing and Urban Development (HUD) may consider the Authority non-compliant with the HUD Grant Agreement and withhold or reduce future Federal funding. Notably, HUD has signed a settlement agreement due to environmental health and safety issues on NYCHA properties and NYCHA is in the process of implementing the terms of the settlement agreement. 5. REPEAT FINDING Yes During our 2023 audit, we made additional selections and noted that the Authority did not complete all corrective actions in the 2023 audit period. 6. RECOMMENDATION We recommend that the Authority continue to ensure that all environmental contaminates are properly remediated during the audit period through the HUD Agreement. 7. QUESTIONED COST None. 8. VIEWS OF RESPONSIBLE OFFICIAL In January 2019, the Authority entered into the HUD Agreement to address building conditions, including conditions related to lead-based paint, mold, pests, elevators, and heating. Among other things, the HUD Agreement appointed a federal Monitor and established three new Departments – Compliance, Environmental Health & Safety, and Quality Assurance. It also required the promulgation of action plans around these health and safety issues and other items. These action plans are publicly available https://www1.nyc.gov/site/nycha/about/reports.page, along with other reports on health and safety issues, which detail the Authority’s efforts to inspect for and correct deficiencies associated with environmental contaminants like lead-based paint and mold. The Authority plans to continue to work to address these health and safety issues, and to work towards meeting the multi-year obligations laid out in the HUD agreement in addition to the action plans. NYCHA has recorded $4,392,861,000 of pollution remediation obligations as of December 31, 2023 which relates to costs to inspect for, and correct deficiencies associated with environmental contaminants.
Finding 2023-002
FINDING # 2023-002 ELIGIBILITY – DEFICIENCY - COMPLIANCE PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA Eligibility for Individuals - Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Public and Indian Housing Program is to provide and operate cost effective, decent, safe, and affordable dwellings for lower income families through an authorized local PHA. Of the sixty (60) case files selected for testing in which 540 pieces of audit evidence (eligibility forms as noted in the Criteria section above) were requested to be provided: • Eight eligibility forms were not provided (five missing application forms, one missing certifications information provided to the PHA forms and two missing Release form). These forms are required documentation to be maintained in the case files to support eligibility for Public and Indian Housing Program. Therefore, we were not able to determine if the eligible participants met all the eligibility criteria. 3. CAUSE The Authority did not ensure that all required eligibility forms were obtained from the tenants and included in the case files timely. 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the eligibility requirements. 5. REPEAT FINDING Yes 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Public and Indian Housing Program case files to ensure that all eligibility forms are received, reviewed, and maintained in the case files to support the determination of eligibility. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL In January 2011, NYCHA implemented the Siebel Customer Relationship Management (CRM) system, which included digital file storage and an online application process, which replaced our previous paper application process. Any applications in process from that date onward were subject to document scanning and documentation was stored digitally. Any applications processed prior to this date were kept in a paper format and stored at the development, where the applicant was certified or where the tenant resides. If a tenant family transferred to another development, the physical tenant folder and documents were sent to their new location. In June 2020, NYCHA sought to digitize all tenant folders; however, the cost of the project was determined to be prohibitive so the goal of digitizing the tenant folders was not realized. Any documents damaged or lost prior to 2011 cannot be recovered, including those impacted by Hurricane Sandy.
Finding 2023-003
FINDING # 2023-003 PROCUREMENT AND SUSPENSION AND DEBARMENT – DEFICIENCY - COMPLIANCE PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA – Procurement And Suspension And Debarment - Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov | Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Non-federal entities receiving contracts from the federal government are required to comply with the contract clause at FAR 52.209-6 before entering into a subcontract that will exceed $30,000, other than a subcontract for a commercially available off-the-shelf item. 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Authority has procurement and suspension and Debarment policies. Of the sixty (60) vendor files selected for testing, we noted 3 vendor’s suspension and Debarment documentation were not provided by the Authority. The Authority did review suspension and Debarment status in SAM.GOV for the samples in question, which had no documentation of suspension and Debarment and all vendors were active and no suspensions noted. 3. CAUSE At the time the Authority made an award to the vendor, the Authority did not ensure the vendor was not suspended or debarred. . 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the Procurement and Suspension and Debarment compliance requirements. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Public and Indian Housing program’s Procurement and Suspension and Debarment policies to ensure that all vendors are not suspended or debarred prior to the award of a contract. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL In June 2022, NYCHA implemented the Dun & Bradstreet (D&B) Supplier Risk Management tool for development/program units to check federal debarment status of micro vendors. In addition, in February 2023, NYCHA also implemented the self-certification debarment form for micro vendors. Currently, all micro vendors who wish to be placed on the Micro Prequalification List (Micro PQL) for Responsibility to be eligible for a micro award undergo an integrity/responsibility review by a centralized vendor responsibility department prior to being placed on the Micro PQL. This review includes debarment checks among many other integrity assessments. The Micro PQL will go in effect on September 30, 2024. Given that NYCHA’s micro spend comprises less than 4% of total spend in 2021 through 2023 (and approximately 1.1% as of Q3 of 2024), concomitant with the fact that NYCHA has already implemented corrective actions to ensure all vendors are checked for debarments, NYCHA believes the risk of this deficiency to be insignificant
Finding 2023-001
FINDING # 2023-001 SPECIAL TESTS AND PROVISIONS- ENVIRONMENTAL CONTAMINANTS TESTING AND REMEDIATION – MATERIAL WEAKNESS PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA Special Tests and Provisions - Environmental Contaminants Testing and Remediation As stated in the May 2023 Compliance Supplement, Public Housing must be decent, safe, sanitary, and in good repair. Public Housing Authority’s (PHA) must maintain such housing in a manner that meets the physical condition standards set forth in 24 CFR section 5.703 in order to be considered decent, safe, sanitary, and in good repair. Those standards address the major areas of the public housing: the site; the building exterior; the building systems; the dwelling units; the common areas; and health and safety considerations. Health and safety considerations require that all areas and components of the housing must be free of health and safety hazards. These areas include, but are not limited to, air quality, electrical hazards, elevators, emergency/fire exits, flammable materials, garbage and debris, handrail hazards, infestation, and lead-based paint. The housing must have no evidence of infestation by rats, mice, or other vermin, or of garbage and debris. The housing must have no evidence of electrical hazards, natural hazards, or fire hazards. The dwelling units and common areas must have proper ventilation and be free of mold, odor (e.g., propane, natural gas, methane gas), or other indoor air hazards such as radon. The housing must comply with all requirements related to the evaluation and reduction of lead-based paint hazards and have available proper certifications of such (see 24 CFR Part 35). For the period under audit, the PHA is required to test for and remediate environmental contaminates including but not limited to lead-based paint, radon gas, and mold to ensure that public housing met the physical condition standards for health and safety considerations set forth in 24 CFR section 5.703. 2. CONDITION/PERSPECTIVE The New York City Housing Authority (the “Authority”) performs environmental contaminates testing and remediation including but not limited to Lead-based paint, Mold, Pest Control, Elevators, Heating and Annual Apartment Inspections. To track compliance with the Agreement executed on January 31, 2019 by and among the Authority, the U.S. Department of Housing and Urban Development (“HUD”) and the U.S. Attorney’s Office for the Southern District of New York (SDNY) and The City Of New York (the “HUD Agreement”), the Authority maintains monthly inspection reports for the various inspections performed and provides that information to HUD, the SDNY and the Federal Monitor appointed under the HUD Agreement. Deloitte obtained the bi-annual lead-based paint compliance reports from the Authority and for the Period from June 16, 2023 through December 15, 2023 and December 16, 2022 through July 15, 2023, we read extermination, heat outage, mold inspections, annual apartment inspections, and elevator outage reports for the months of February 2023; April 2023; July 2023; September 2023 and November 2023. During our audit, we noted that the Authority did not complete all corrective actions in the 2023 audit period and is in the process of addressing these issues. 3. CAUSE Some environmental contaminates were not remediated in the 2023 audit period. 4. EFFECT The U.S. Department of Housing and Urban Development (HUD) may consider the Authority non-compliant with the HUD Grant Agreement and withhold or reduce future Federal funding. Notably, HUD has signed a settlement agreement due to environmental health and safety issues on NYCHA properties and NYCHA is in the process of implementing the terms of the settlement agreement. 5. REPEAT FINDING Yes During our 2023 audit, we made additional selections and noted that the Authority did not complete all corrective actions in the 2023 audit period. 6. RECOMMENDATION We recommend that the Authority continue to ensure that all environmental contaminates are properly remediated during the audit period through the HUD Agreement. 7. QUESTIONED COST None. 8. VIEWS OF RESPONSIBLE OFFICIAL In January 2019, the Authority entered into the HUD Agreement to address building conditions, including conditions related to lead-based paint, mold, pests, elevators, and heating. Among other things, the HUD Agreement appointed a federal Monitor and established three new Departments – Compliance, Environmental Health & Safety, and Quality Assurance. It also required the promulgation of action plans around these health and safety issues and other items. These action plans are publicly available https://www1.nyc.gov/site/nycha/about/reports.page, along with other reports on health and safety issues, which detail the Authority’s efforts to inspect for and correct deficiencies associated with environmental contaminants like lead-based paint and mold. The Authority plans to continue to work to address these health and safety issues, and to work towards meeting the multi-year obligations laid out in the HUD agreement in addition to the action plans. NYCHA has recorded $4,392,861,000 of pollution remediation obligations as of December 31, 2023 which relates to costs to inspect for, and correct deficiencies associated with environmental contaminants.
Finding 2023-002
FINDING # 2023-002 ELIGIBILITY – DEFICIENCY - COMPLIANCE PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA Eligibility for Individuals - Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Public and Indian Housing Program is to provide and operate cost effective, decent, safe, and affordable dwellings for lower income families through an authorized local PHA. Of the sixty (60) case files selected for testing in which 540 pieces of audit evidence (eligibility forms as noted in the Criteria section above) were requested to be provided: • Eight eligibility forms were not provided (five missing application forms, one missing certifications information provided to the PHA forms and two missing Release form). These forms are required documentation to be maintained in the case files to support eligibility for Public and Indian Housing Program. Therefore, we were not able to determine if the eligible participants met all the eligibility criteria. 3. CAUSE The Authority did not ensure that all required eligibility forms were obtained from the tenants and included in the case files timely. 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the eligibility requirements. 5. REPEAT FINDING Yes 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Public and Indian Housing Program case files to ensure that all eligibility forms are received, reviewed, and maintained in the case files to support the determination of eligibility. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL In January 2011, NYCHA implemented the Siebel Customer Relationship Management (CRM) system, which included digital file storage and an online application process, which replaced our previous paper application process. Any applications in process from that date onward were subject to document scanning and documentation was stored digitally. Any applications processed prior to this date were kept in a paper format and stored at the development, where the applicant was certified or where the tenant resides. If a tenant family transferred to another development, the physical tenant folder and documents were sent to their new location. In June 2020, NYCHA sought to digitize all tenant folders; however, the cost of the project was determined to be prohibitive so the goal of digitizing the tenant folders was not realized. Any documents damaged or lost prior to 2011 cannot be recovered, including those impacted by Hurricane Sandy.
Finding 2023-003
FINDING # 2023-003 PROCUREMENT AND SUSPENSION AND DEBARMENT – DEFICIENCY - COMPLIANCE PUBLIC AND INDIAN HOUSING (ALN # 14.850) CONTRACT #: NOT AVAILABLE FEDERAL AGENCY: U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 1. CRITERIA – Procurement And Suspension And Debarment - Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal 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. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov | Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Non-federal entities receiving contracts from the federal government are required to comply with the contract clause at FAR 52.209-6 before entering into a subcontract that will exceed $30,000, other than a subcontract for a commercially available off-the-shelf item. 2. CONDITION/PERSPECTIVE The Authority received funding from the HUD. The Authority has procurement and suspension and Debarment policies. Of the sixty (60) vendor files selected for testing, we noted 3 vendor’s suspension and Debarment documentation were not provided by the Authority. The Authority did review suspension and Debarment status in SAM.GOV for the samples in question, which had no documentation of suspension and Debarment and all vendors were active and no suspensions noted. 3. CAUSE At the time the Authority made an award to the vendor, the Authority did not ensure the vendor was not suspended or debarred. . 4. EFFECT The U.S. Department of Housing and Urban Development may consider the Authority non-compliant with the Procurement and Suspension and Debarment compliance requirements. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend the Authority strengthen its controls over the Public and Indian Housing program’s Procurement and Suspension and Debarment policies to ensure that all vendors are not suspended or debarred prior to the award of a contract. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL In June 2022, NYCHA implemented the Dun & Bradstreet (D&B) Supplier Risk Management tool for development/program units to check federal debarment status of micro vendors. In addition, in February 2023, NYCHA also implemented the self-certification debarment form for micro vendors. Currently, all micro vendors who wish to be placed on the Micro Prequalification List (Micro PQL) for Responsibility to be eligible for a micro award undergo an integrity/responsibility review by a centralized vendor responsibility department prior to being placed on the Micro PQL. This review includes debarment checks among many other integrity assessments. The Micro PQL will go in effect on September 30, 2024. Given that NYCHA’s micro spend comprises less than 4% of total spend in 2021 through 2023 (and approximately 1.1% as of Q3 of 2024), concomitant with the fact that NYCHA has already implemented corrective actions to ensure all vendors are checked for debarments, NYCHA believes the risk of this deficiency to be insignificant