Audit 335003

Finding 2024-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy. Context: Two (2) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that one (1) out of two (2) new move-ins selected could not be traced with any certainty back to the Authority's waiting list. Known Questioned Costs: $3,320 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list as proper documentation for new admissions was not maintained. 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 Public and Indian Housing Program is in material non-compliance with the special tests and provisions type of compliance related to selections from the waiting list, as new admissions to the program could be admitted in violation of HUD rules and the Authority's Admissions and Continued Occupancy Policy. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. View of Responsible Officials and Corrective Actions: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – N. Special Tests and Provisions – Depository Agreements Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: PHAs are required to enter into depository agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC). Condition: Based on inspection of files and discussions with management, it was determined that depository agreements were not on file during the time of audit. Context: The Authority did not have depository agreements with their financial institutions on file during the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements. Cause: There is a significant deficiency in internal controls over compliance for the special tests and provision type of compliance as management did not obtain the required depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered management company that assures the program is in compliance. Effect: The Public and Indian Housing Program is in non-compliance with the special tests and provisions type of compliance related to depository agreements. related to their partnered management companies that will assure compliance with the Uniform Guidance and the compliance supplement. View of Responsible Officials and Corrective Actions: We agree with the Auditors' findings. The identified finding occurred under a prior administration at the Authority. The Authority will increase oversight in the Public and Indian Housing Program to ensure that established internal control policies are being followed on a timely basis.

Finding 2024-002: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy. Context: Two (2) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that one (1) out of two (2) new move-ins selected could not be traced with any certainty back to the Authority's waiting list. Known Questioned Costs: $3,320 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list as proper documentation for new admissions was not maintained. 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 Public and Indian Housing Program is in material non-compliance with the special tests and provisions type of compliance related to selections from the waiting list, as new admissions to the program could be admitted in violation of HUD rules and the Authority's Admissions and Continued Occupancy Policy. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. View of Responsible Officials and Corrective Actions: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures that will ensure compliance with federal regulations.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Public and Indian Housing Program Federal Assistance Listing Numbers: 14.850 Noncompliance – N. Special Tests and Provisions – Depository Agreements Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: PHAs are required to enter into depository agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC). Condition: Based on inspection of files and discussions with management, it was determined that depository agreements were not on file during the time of audit. Context: The Authority did not have depository agreements with their financial institutions on file during the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements. Cause: There is a significant deficiency in internal controls over compliance for the special tests and provision type of compliance as management did not obtain the required depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered management company that assures the program is in compliance. Effect: The Public and Indian Housing Program is in non-compliance with the special tests and provisions type of compliance related to depository agreements. related to their partnered management companies that will assure compliance with the Uniform Guidance and the compliance supplement. View of Responsible Officials and Corrective Actions: We agree with the Auditors' findings. The identified finding occurred under a prior administration at the Authority. The Authority will increase oversight in the Public and Indian Housing Program to ensure that established internal control policies are being followed on a timely basis.