Audit 331015

FY End

2024-03-31

Total Expended

$47.53M

Findings

2

Programs

6

Organization: Housing Authority of the City of Paterson (NJ)

Year: 2024 Accepted: 2024-12-05

Auditor: Novogradac & Company LLP

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
513086	2024-002	Material Weakness	Yes	N
1089528	2024-002	Material Weakness	Yes	N

ALN	Program	Spent	Major	Findings
14.871	Section 8 Housing Choice Vouchers	$39.01M	Yes	1
14.850	Public Housing Operating Fund	$4.13M	-	0
14.872	Public Housing Capital Fund	$3.60M	-	0
14.218	Community Development Block Grants/entitlement Grants	$704,489	-	0
14.896	Family Self-Sufficiency Program	$59,660	-	0
14.169	Housing Counseling Assistance Program	$20,178	-	0

Contacts

Name	Title	Type
VCQQJ7QP7BC5	Shruti Shah	Auditee
9736848248	Rich Larsen	Auditor
No contacts on file

Notes to SEFA

Accounting Policies: BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Housing Authority of the City of Paterson under programs of the federal government for the year ended March 31, 2024. The information in the 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) and the State of New Jersey OMB Circular 15-08. Because the Schedule presents only a selected portion of operations of the Housing Authority of the City of Paterson, it is not intended to and does not present the financial position, changes in net position or cash flows of the Housing Authority of the City of Paterson. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the 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 elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

Finding Details

Finding 2024-002

Finding 2024-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Voucher & Emergency Housing Vouchers Assistance Listing Number: 14.871 & 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Non Compliance Material to the Financial Statements: Section 8 Housing Choice Vouchers - Yes Emergency Housing Vouchers - No. Material Weakness and Significant Deficiency 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 annually 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 discussions with management, the Authority did not properly abate fifteen (15) out of twenty-nine (29) annual failed inspections selected for testing. Context: The Authority did not properly abate fifteen (15) out of twenty-nine (29) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: Section 8 Housing Choice Vouchers $50,873 Emergency Housing Vouchers $1,308. Cause: There is a material weakness in Section 8 Housing Choice Vouchers and a significant deficiency in Emergency Housing Vouchers in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. 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 special tests and provisions type of compliance related to HQS inspections and the Emergency Housing Vouchers Program is in 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 assure compliance with the Uniform Guidance and the compliance supplement.

Finding 2024-002

Finding 2024-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Voucher & Emergency Housing Vouchers Assistance Listing Number: 14.871 & 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Non Compliance Material to the Financial Statements: Section 8 Housing Choice Vouchers - Yes Emergency Housing Vouchers - No. Material Weakness and Significant Deficiency 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 annually 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 discussions with management, the Authority did not properly abate fifteen (15) out of twenty-nine (29) annual failed inspections selected for testing. Context: The Authority did not properly abate fifteen (15) out of twenty-nine (29) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b). Known Questioned Costs: Section 8 Housing Choice Vouchers $50,873 Emergency Housing Vouchers $1,308. Cause: There is a material weakness in Section 8 Housing Choice Vouchers and a significant deficiency in Emergency Housing Vouchers in internal controls over compliance for the special tests and provisions type of compliance related to HQS inspections. 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 special tests and provisions type of compliance related to HQS inspections and the Emergency Housing Vouchers Program is in 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 assure compliance with the Uniform Guidance and the compliance supplement.