Audit 347893

2024-001 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Totals, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2024. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified a variance in the Data Collection Report line for HAP - Portability In, Unrestricted Net Position and Restricted Net Position when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-003 ALN 14.850 – Public Housing Operating Fund – Eligibility Condition and Criteria: In accordance with HUD eligibility requirements set forth in 24 CFR § 5, subpart F and § 960.259, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Public Housing Operating Fund program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority’s personnel responsible for eligibility determination procedures were not properly filing annual and interim recertification's form HUD-50058 in tenant files. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 1 of these tenant files was unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on this tenant file. Additionally, 9 of the tenant files tested did not have an EIV report, 1 tenant file tested did not have a signed Declaration of Section 214 Status, 2 of the tenant files tested did not have a copy of the requested HUD-50058, and 1 of the tenant files tested did not have adequate 3rd party support for income. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Public Housing tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation per 24 CFR § 5, subpart F and § 960.259 is maintained. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-004 ALN 14.871 – Housing Voucher Cluster – Eligibility Condition and Criteria: In accordance with HUD requirements, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility for the HCV program. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Housing Choice Voucher program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority's internal controls over their eligibility process are deficient as the Authority's staff failed to adequately apply the controls that have been implemented over family income examinations and reexaminations. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 1 of these tenant files was unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on this tenant file. Additionally, 10 of the tenant files tested did not have an EIV report, 5 of the tenant files tested were missing a signed Declaration of Section 214 Status, 1 tenant file tested did not have the requested copy of the HUD-50058, 10 tenant files tested did not have a copy of the up to date signed HAP contract, 3 tenant files tested had an incorrect utility allowance used, and there was 1 instance of a system failure that caused an additional payment. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Housing Choice Voucher tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation is maintained per Federal regulations and the Authority's Section 8 Administrative Plan. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-001 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Totals, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2024. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified a variance in the Data Collection Report line for HAP - Portability In, Unrestricted Net Position and Restricted Net Position when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-003 ALN 14.850 – Public Housing Operating Fund – Eligibility Condition and Criteria: In accordance with HUD eligibility requirements set forth in 24 CFR § 5, subpart F and § 960.259, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Public Housing Operating Fund program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority’s personnel responsible for eligibility determination procedures were not properly filing annual and interim recertification's form HUD-50058 in tenant files. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 1 of these tenant files was unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on this tenant file. Additionally, 9 of the tenant files tested did not have an EIV report, 1 tenant file tested did not have a signed Declaration of Section 214 Status, 2 of the tenant files tested did not have a copy of the requested HUD-50058, and 1 of the tenant files tested did not have adequate 3rd party support for income. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Public Housing tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation per 24 CFR § 5, subpart F and § 960.259 is maintained. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-004 ALN 14.871 – Housing Voucher Cluster – Eligibility Condition and Criteria: In accordance with HUD requirements, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility for the HCV program. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Housing Choice Voucher program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority's internal controls over their eligibility process are deficient as the Authority's staff failed to adequately apply the controls that have been implemented over family income examinations and reexaminations. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 1 of these tenant files was unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on this tenant file. Additionally, 10 of the tenant files tested did not have an EIV report, 5 of the tenant files tested were missing a signed Declaration of Section 214 Status, 1 tenant file tested did not have the requested copy of the HUD-50058, 10 tenant files tested did not have a copy of the up to date signed HAP contract, 3 tenant files tested had an incorrect utility allowance used, and there was 1 instance of a system failure that caused an additional payment. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Housing Choice Voucher tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation is maintained per Federal regulations and the Authority's Section 8 Administrative Plan. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.