Criteria: HUD requires Authority employees, the Authority Board, and public officials that exercise authority over the Authority to perform their duties in an ethical manner. As such, HUD's programs contain specific prohibitions with respect to conflicts of interest. Per Section 19 of the Annual Contributions Contract ("ACC") for the Public and Indian Housing program, neither the Authority nor any of its contractors or their subcontractors may enter into any contract subcontract, or arrangement in connection with a project under this ACC in which any of the following classes of people have an interest, direct or indirect, during his or her tenure or for one year thereafter: 1. Any present or former member or office of the governing body of the Authority, or any member of the officer's immediate family.
2. Any employee of the Authority who formulates policy or who influences decisions with respect to the projects, or any member of the employee's immediate family, or the employee's partner.
3. Any public official, member of the local governing body, or State or local legislator, who exercises functions or responsibilities with respect to the projects or the HA. In addition, any member of these classes of persons must disclose the member's interest or prospective interest to the Authority and HUD. The term "immediate family" means the spouse, mother, father, brother, sister, or child of a covered class member.
Condition: Based upon discussions with management and review of invoices selected for cash disbursement testing, there were three (3) vendors in which there was a conflict of interest violating Section 19 of the ACC.
Context: As part of the cash disbursements testing, we selected a sample of invoices that were paid during the audit period. Based on review of those invoices, there were three (3) vendors in which there was a conflict of interest violating Section 19 of the ACC.
Known Questioned Costs: $333,390 Cause: The Authority did not comply with Section 19 of the ACC as it relates to conflicts of interest for the Public and Indian Housing program.
Effect: The Authority's non-compliance with Section 19 of the ACC as it relates to conflicts of interest for the Public and Indian Housing program.
Recommendation: We recommend the Authority update their Personnel Policy to include conflicts of interest as described in Section 19 of the ACC and design and implement internal control procedures that will reasonably assure compliance with Section 19 of the ACC as it related to conflicts of interest.
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Catalog Numbers: 14.871 and 14.879
Noncompliance – E. Eligibility - Tenant Files
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Eligibility
Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority's files and on discussion with management, there were documents that were unavailable for examination at the time of audit.
Context: Of a sample size of twenty seven (27) tenant files, the Authority could not provide verification of income for (2) tenants.
Our sample size is statistically valid.
Known Questioned Costs: $20,616
Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Vouchers program is in material non-compliance with the eligibility type of compliance related to maintenance of tenant files.
Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Numbers: 14.871 and 14.879
Noncompliance – N. Special Tests and Provisions - Housing Quality Standards
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days.
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that were not inspected within the biennial inspection period of two (2) years. Additionally, there were units that failed inspections that did not pass reinspection within 30 days without penalty.
Context: There are approximately one thousand four hundred and twenty five (1,425) Section 8 Housing Choice Vouchers' units and ninety nine (99) Mainstream Vouchers' units. Of a samples size of twenty seven (27) Section 8 Housing Choice Vouchers' files and ten (10) Mainstream Vouchers' files, two (2) and one (1) biennial inspections, respectively, were not completed in a timely manner. Additionally, there are approximately two hundred and twelve (212) Section 8 Housing Choice Vouchers' units and fifteen (15) Mainstream Vouchers' units with failed inspections. Of a sample size of twenty one (21) Section 8 Housing Choice Vouchers' failed inspections and two (2) Mainstream Vouchers' failed inspections, ten (10) and one (1) failed inspections, respectively, did not pass reinspection within 30 days. Housing assistance payments were not abated nor was the tenant relocated.
Our sample size is statistically valid.
Known Questioned Costs: $5,324
Cause: There is a material weakness for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed biennial HQS inspections in compliance with program requirements.
Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to HQS inspections.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Numbers: 14.871 and 14.879
Noncompliance – N. Special Tests and Provisions - Housing Quality Standards
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days.
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that were not inspected within the biennial inspection period of two (2) years. Additionally, there were units that failed inspections that did not pass reinspection within 30 days without penalty.
Context: There are approximately one thousand four hundred and twenty five (1,425) Section 8 Housing Choice Vouchers' units and ninety nine (99) Mainstream Vouchers' units. Of a samples size of twenty seven (27) Section 8 Housing Choice Vouchers' files and ten (10) Mainstream Vouchers' files, two (2) and one (1) biennial inspections, respectively, were not completed in a timely manner. Additionally, there are approximately two hundred and twelve (212) Section 8 Housing Choice Vouchers' units and fifteen (15) Mainstream Vouchers' units with failed inspections. Of a sample size of twenty one (21) Section 8 Housing Choice Vouchers' failed inspections and two (2) Mainstream Vouchers' failed inspections, ten (10) and one (1) failed inspections, respectively, did not pass reinspection within 30 days. Housing assistance payments were not abated nor was the tenant relocated.
Our sample size is statistically valid.
Known Questioned Costs: $5,324
Cause: There is a material weakness for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed biennial HQS inspections in compliance with program requirements.
Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to HQS inspections.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public Housing Capital Fund Program
Federal Assistance Listing Numbers: 14.872
Noncompliance – N. Special Tests and Provisions - Wage Rate Requirements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Wage Rate Requirements. Projects funded with Capital Funds that are developed and/or modernized in accordance with 24 CFR Part 905, Subpart F, including projects that contain only public housing units and mixed finance projects are subject to the Wage Rate Requirements (42 USC 1437J(a)
and (b); 24CFR section 905.308). Davis-Bacon wage rates. For all work or contracts exceeding $2,000 in connection with development activities or modernization activities (except for nonroutine maintenance work, as defined in § 905.200(b)(5) of this part), all laborers and mechanics employed on the construction, alteration, or repair shall be paid not less than the wages prevailing in the locality, as determined by the Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 3142).
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were projects for which contracts were entered into for which the Authority did not properly document the wage rate requirements.
Context: Based upon the Authority's contract log and discussions with management, there were two (2)
vendors who were awarded contracts for projects utilizing Capital Funds in excess of $2,000. Of a sample size of one (1) contract, the one (1) contracts' documentation did not contain the required wage rate requirements.
Our sample size is statistically valid.
Cause: There is a significant deficiency for the Public Housing Capital Fund program in internal controls over the compliance for the special tests and provisions type of compliance related to wage rate requirements. The Authority has not properly documented the wage rate requirements in compliance with program requirements.
Effect: The Public Housing Capital Fund program is in non-compliance with the special tests and provisions type of compliance related to wage rate requirements.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Criteria: HUD requires Authority employees, the Authority Board, and public officials that exercise authority over the Authority to perform their duties in an ethical manner. As such, HUD's programs contain specific prohibitions with respect to conflicts of interest. Per Section 19 of the Annual Contributions Contract ("ACC") for the Public and Indian Housing program, neither the Authority nor any of its contractors or their subcontractors may enter into any contract subcontract, or arrangement in connection with a project under this ACC in which any of the following classes of people have an interest, direct or indirect, during his or her tenure or for one year thereafter: 1. Any present or former member or office of the governing body of the Authority, or any member of the officer's immediate family.
2. Any employee of the Authority who formulates policy or who influences decisions with respect to the projects, or any member of the employee's immediate family, or the employee's partner.
3. Any public official, member of the local governing body, or State or local legislator, who exercises functions or responsibilities with respect to the projects or the HA. In addition, any member of these classes of persons must disclose the member's interest or prospective interest to the Authority and HUD. The term "immediate family" means the spouse, mother, father, brother, sister, or child of a covered class member.
Condition: Based upon discussions with management and review of invoices selected for cash disbursement testing, there were three (3) vendors in which there was a conflict of interest violating Section 19 of the ACC.
Context: As part of the cash disbursements testing, we selected a sample of invoices that were paid during the audit period. Based on review of those invoices, there were three (3) vendors in which there was a conflict of interest violating Section 19 of the ACC.
Known Questioned Costs: $333,390 Cause: The Authority did not comply with Section 19 of the ACC as it relates to conflicts of interest for the Public and Indian Housing program.
Effect: The Authority's non-compliance with Section 19 of the ACC as it relates to conflicts of interest for the Public and Indian Housing program.
Recommendation: We recommend the Authority update their Personnel Policy to include conflicts of interest as described in Section 19 of the ACC and design and implement internal control procedures that will reasonably assure compliance with Section 19 of the ACC as it related to conflicts of interest.
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Catalog Numbers: 14.871 and 14.879
Noncompliance – E. Eligibility - Tenant Files
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Eligibility
Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority's files and on discussion with management, there were documents that were unavailable for examination at the time of audit.
Context: Of a sample size of twenty seven (27) tenant files, the Authority could not provide verification of income for (2) tenants.
Our sample size is statistically valid.
Known Questioned Costs: $20,616
Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Vouchers program is in material non-compliance with the eligibility type of compliance related to maintenance of tenant files.
Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Numbers: 14.871 and 14.879
Noncompliance – N. Special Tests and Provisions - Housing Quality Standards
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days.
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that were not inspected within the biennial inspection period of two (2) years. Additionally, there were units that failed inspections that did not pass reinspection within 30 days without penalty.
Context: There are approximately one thousand four hundred and twenty five (1,425) Section 8 Housing Choice Vouchers' units and ninety nine (99) Mainstream Vouchers' units. Of a samples size of twenty seven (27) Section 8 Housing Choice Vouchers' files and ten (10) Mainstream Vouchers' files, two (2) and one (1) biennial inspections, respectively, were not completed in a timely manner. Additionally, there are approximately two hundred and twelve (212) Section 8 Housing Choice Vouchers' units and fifteen (15) Mainstream Vouchers' units with failed inspections. Of a sample size of twenty one (21) Section 8 Housing Choice Vouchers' failed inspections and two (2) Mainstream Vouchers' failed inspections, ten (10) and one (1) failed inspections, respectively, did not pass reinspection within 30 days. Housing assistance payments were not abated nor was the tenant relocated.
Our sample size is statistically valid.
Known Questioned Costs: $5,324
Cause: There is a material weakness for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed biennial HQS inspections in compliance with program requirements.
Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to HQS inspections.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Numbers: 14.871 and 14.879
Noncompliance – N. Special Tests and Provisions - Housing Quality Standards
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days.
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were units that were not inspected within the biennial inspection period of two (2) years. Additionally, there were units that failed inspections that did not pass reinspection within 30 days without penalty.
Context: There are approximately one thousand four hundred and twenty five (1,425) Section 8 Housing Choice Vouchers' units and ninety nine (99) Mainstream Vouchers' units. Of a samples size of twenty seven (27) Section 8 Housing Choice Vouchers' files and ten (10) Mainstream Vouchers' files, two (2) and one (1) biennial inspections, respectively, were not completed in a timely manner. Additionally, there are approximately two hundred and twelve (212) Section 8 Housing Choice Vouchers' units and fifteen (15) Mainstream Vouchers' units with failed inspections. Of a sample size of twenty one (21) Section 8 Housing Choice Vouchers' failed inspections and two (2) Mainstream Vouchers' failed inspections, ten (10) and one (1) failed inspections, respectively, did not pass reinspection within 30 days. Housing assistance payments were not abated nor was the tenant relocated.
Our sample size is statistically valid.
Known Questioned Costs: $5,324
Cause: There is a material weakness for the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed biennial HQS inspections in compliance with program requirements.
Effect: The Section 8 Housing Choice Vouchers and Mainstream Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to HQS inspections.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public Housing Capital Fund Program
Federal Assistance Listing Numbers: 14.872
Noncompliance – N. Special Tests and Provisions - Wage Rate Requirements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Wage Rate Requirements. Projects funded with Capital Funds that are developed and/or modernized in accordance with 24 CFR Part 905, Subpart F, including projects that contain only public housing units and mixed finance projects are subject to the Wage Rate Requirements (42 USC 1437J(a)
and (b); 24CFR section 905.308). Davis-Bacon wage rates. For all work or contracts exceeding $2,000 in connection with development activities or modernization activities (except for nonroutine maintenance work, as defined in § 905.200(b)(5) of this part), all laborers and mechanics employed on the construction, alteration, or repair shall be paid not less than the wages prevailing in the locality, as determined by the Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 3142).
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were projects for which contracts were entered into for which the Authority did not properly document the wage rate requirements.
Context: Based upon the Authority's contract log and discussions with management, there were two (2)
vendors who were awarded contracts for projects utilizing Capital Funds in excess of $2,000. Of a sample size of one (1) contract, the one (1) contracts' documentation did not contain the required wage rate requirements.
Our sample size is statistically valid.
Cause: There is a significant deficiency for the Public Housing Capital Fund program in internal controls over the compliance for the special tests and provisions type of compliance related to wage rate requirements. The Authority has not properly documented the wage rate requirements in compliance with program requirements.
Effect: The Public Housing Capital Fund program is in non-compliance with the special tests and provisions type of compliance related to wage rate requirements.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.