Audit 347986

Low Rent Program-CDFA#14.850 and Capital Fund Program-CDFA# 14.872 Finding 2024-001-Non-Compliance With Procurement Policy-Procurement Criteria and Condition All amounts above the Small Purchase Threshold (SMT) should follow the Procurement Policy. Depending on the amount, telephone, email, or written bids may be acceptable. In other instances, depending on the estimated amount of the expenditure, more strict methods are required by both the Authority’s Procurement Policy and also federal regulations regarding procurement. Even when individual expenditure amounts paid are below the SMT, if it is reasonable to assume that similar expenditures through the year will in total exceed the SMT, obtaining other quotes is still required. Context The adherence to policy has improved since this finding was made in the prior year. Each Low Rent manager maintains a book of quotes and comparable prices for the services they procure. However, it appears the following major expenditures were not bid out: $86,764-Cameras and related equipment and support $100,441-Air conditioning replacements, repairs, and maintenance Effect It is possible that similar services might be procured for less dollars. Cause Management asserts that there are few if any other vendors in the Lawton area for the above services, or in the situation of air conditioning, are reliable and prompt. Recommendation As noted above in Context, the authority has improved its solicitation and documentation of efforts to obtain smaller items. For the two noted in the audit finding above, we suggest attempting to obtain quotes in nearby larger towns also. View of Responsible Official I am Rita Love, Executive Director and Designated Person to answer these audit findings. We will comply with the auditor’s recommendation.

Low Rent Program-CDFA#14.850 Finding 2024-002-Internal Control Over Compliance Needs Improvement-Eligibility Criteria and Condition It appears that there was not a representative check of tenant file and waiting list functions by a qualified second party. Auditing Statement of Auditing Standards (SAS) #115 dictates that either “absent or inadequate segregation of duties within a significant account or process” are defined by the Standard as at least a significant deficiency, if not a material weakness. The lack of a documented check noted in the first sentence is considered an inadequate segregation of duties. Context We reviewed twenty-five Low Rent files. For two re-examinations we were unable to review an annual inspection checklist. For one re-examination, we were unable to review an EIV. For three re-examinations, the lease and annual re-certifications were past-due. Effect Lease recertification procedures were deficient in these instances. Cause Apparent oversight. Recommendation Quality control checks of the waiting list and all tenant file procedures should be timely made and documented. Annual inspections should be done, documented, and available for third party review. Enterprise Income Verification [EIV] should be done, documented and available for third party review. Leases should be redone at least annually. View of Responsible Official We will comply with the auditor’s recommendation.

Low Rent-CDFA#14.850 Finding 2024-003-Inventory of Maintenance Equipment and Office Furniture Should Be Updated-Special Tests Criteria and Condition Federal regulations require the authority to update its inventory of equipment and office furniture at least every two years. Context The listing has not been updated in several years. We do note that the ranges, refrigerators, and hot water heaters in each unit are maintained by serial number. Effect The estimated effect of non-compliance is likely minimal. The office and Maintenance shop have not been moved or remodeled. The E.D. and Procurement officer are aware of the whereabouts of all authority-owned vehicles and who drives them. Cause Oversight by management. Questioned Cost None Recommendation There are various ways to document an update of the inventory. A common method is to tag with a number all items. Small items such as screw drivers can be disregarded. Then, on Excel or something similar, a description such as “Maint Area” is entered on an assigned page, and the numbered items for that area are listed. The inventory should be checked at least every two years. View of Responsible Official We will comply with the auditor’s recommendation.

Low Rent Program-CDFA#14.850 and Capital Fund Program-CDFA# 14.872 Finding 2024-001-Non-Compliance With Procurement Policy-Procurement Criteria and Condition All amounts above the Small Purchase Threshold (SMT) should follow the Procurement Policy. Depending on the amount, telephone, email, or written bids may be acceptable. In other instances, depending on the estimated amount of the expenditure, more strict methods are required by both the Authority’s Procurement Policy and also federal regulations regarding procurement. Even when individual expenditure amounts paid are below the SMT, if it is reasonable to assume that similar expenditures through the year will in total exceed the SMT, obtaining other quotes is still required. Context The adherence to policy has improved since this finding was made in the prior year. Each Low Rent manager maintains a book of quotes and comparable prices for the services they procure. However, it appears the following major expenditures were not bid out: $86,764-Cameras and related equipment and support $100,441-Air conditioning replacements, repairs, and maintenance Effect It is possible that similar services might be procured for less dollars. Cause Management asserts that there are few if any other vendors in the Lawton area for the above services, or in the situation of air conditioning, are reliable and prompt. Recommendation As noted above in Context, the authority has improved its solicitation and documentation of efforts to obtain smaller items. For the two noted in the audit finding above, we suggest attempting to obtain quotes in nearby larger towns also. View of Responsible Official I am Rita Love, Executive Director and Designated Person to answer these audit findings. We will comply with the auditor’s recommendation.

Low Rent Program-CDFA#14.850 Finding 2024-002-Internal Control Over Compliance Needs Improvement-Eligibility Criteria and Condition It appears that there was not a representative check of tenant file and waiting list functions by a qualified second party. Auditing Statement of Auditing Standards (SAS) #115 dictates that either “absent or inadequate segregation of duties within a significant account or process” are defined by the Standard as at least a significant deficiency, if not a material weakness. The lack of a documented check noted in the first sentence is considered an inadequate segregation of duties. Context We reviewed twenty-five Low Rent files. For two re-examinations we were unable to review an annual inspection checklist. For one re-examination, we were unable to review an EIV. For three re-examinations, the lease and annual re-certifications were past-due. Effect Lease recertification procedures were deficient in these instances. Cause Apparent oversight. Recommendation Quality control checks of the waiting list and all tenant file procedures should be timely made and documented. Annual inspections should be done, documented, and available for third party review. Enterprise Income Verification [EIV] should be done, documented and available for third party review. Leases should be redone at least annually. View of Responsible Official We will comply with the auditor’s recommendation.

Low Rent-CDFA#14.850 Finding 2024-003-Inventory of Maintenance Equipment and Office Furniture Should Be Updated-Special Tests Criteria and Condition Federal regulations require the authority to update its inventory of equipment and office furniture at least every two years. Context The listing has not been updated in several years. We do note that the ranges, refrigerators, and hot water heaters in each unit are maintained by serial number. Effect The estimated effect of non-compliance is likely minimal. The office and Maintenance shop have not been moved or remodeled. The E.D. and Procurement officer are aware of the whereabouts of all authority-owned vehicles and who drives them. Cause Oversight by management. Questioned Cost None Recommendation There are various ways to document an update of the inventory. A common method is to tag with a number all items. Small items such as screw drivers can be disregarded. Then, on Excel or something similar, a description such as “Maint Area” is entered on an assigned page, and the numbered items for that area are listed. The inventory should be checked at least every two years. View of Responsible Official We will comply with the auditor’s recommendation.