Audit 349205

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, 􀍆Special Tests and Provisions 􀌽 Selection from the Waiting List􀍇) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files: - 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058. - 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation. - 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18. - 1 of 60 files selected did not include the completed housing specialist checklist. The samples were statistically valid samples. Questioned costs: $12,622 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files. Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, 􀍆Special Tests and Provisions 􀌽 Selection from the Waiting List􀍇) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files: - 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058. - 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation. - 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18. - 1 of 60 files selected did not include the completed housing specialist checklist. The samples were statistically valid samples. Questioned costs: $12,622 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files. Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, 􀍆Special Tests and Provisions 􀌽 Selection from the Waiting List􀍇) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files: - 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058. - 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation. - 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18. - 1 of 60 files selected did not include the completed housing specialist checklist. The samples were statistically valid samples. Questioned costs: $12,622 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files. Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition/Context: During our testing of 100 files for reasonable rent requirements, we noted the following in 4 files: - 4 of 100 files tested had a rent reasonableness determination performed after the effective date The samples were statistically valid samples. Questioned costs: $40,800 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 100 files reviewed by the audit team. Of the 100 files reviewed, four contained rent reasonableness determination documentation dated after the effective date. While this remains non-compliant, Virginia Housing views this as a positive indication of progress compared to previous audit findings. This improvement reflects the successful implementation of enhanced quality control measures, which have increased LHA file reviews and improved the correction of deficiencies. Effect: The Authority is not in compliance with HUD’s reasonable rent requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-002. Recommendation: We recommend that the Authority reviews its process over reasonable rent determination to ensure that it is performed timely (before the effective date of the rent payment) and that the approved rent is properly carried forward to the HUD-50058 and HAP contract/HAP contract amendment. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition/Context: During our testing of 100 files for reasonable rent requirements, we noted the following in 4 files: - 4 of 100 files tested had a rent reasonableness determination performed after the effective date The samples were statistically valid samples. Questioned costs: $40,800 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 100 files reviewed by the audit team. Of the 100 files reviewed, four contained rent reasonableness determination documentation dated after the effective date. While this remains non-compliant, Virginia Housing views this as a positive indication of progress compared to previous audit findings. This improvement reflects the successful implementation of enhanced quality control measures, which have increased LHA file reviews and improved the correction of deficiencies. Effect: The Authority is not in compliance with HUD’s reasonable rent requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-002. Recommendation: We recommend that the Authority reviews its process over reasonable rent determination to ensure that it is performed timely (before the effective date of the rent payment) and that the approved rent is properly carried forward to the HUD-50058 and HAP contract/HAP contract amendment. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition/Context: During our testing of 100 files for reasonable rent requirements, we noted the following in 4 files: - 4 of 100 files tested had a rent reasonableness determination performed after the effective date The samples were statistically valid samples. Questioned costs: $40,800 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 100 files reviewed by the audit team. Of the 100 files reviewed, four contained rent reasonableness determination documentation dated after the effective date. While this remains non-compliant, Virginia Housing views this as a positive indication of progress compared to previous audit findings. This improvement reflects the successful implementation of enhanced quality control measures, which have increased LHA file reviews and improved the correction of deficiencies. Effect: The Authority is not in compliance with HUD’s reasonable rent requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-002. Recommendation: We recommend that the Authority reviews its process over reasonable rent determination to ensure that it is performed timely (before the effective date of the rent payment) and that the approved rent is properly carried forward to the HUD-50058 and HAP contract/HAP contract amendment. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files: - 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year. - 7 of 60 files tested had inspections that were not performed annually. - 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection. During our testing of 60 HQS failed inspections, we noted the following in 8 files: - 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency). - 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection. - 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results. The samples were statistically valid samples. Questioned costs: $2,482 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team. Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files: - 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year. - 7 of 60 files tested had inspections that were not performed annually. - 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection. During our testing of 60 HQS failed inspections, we noted the following in 8 files: - 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency). - 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection. - 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results. The samples were statistically valid samples. Questioned costs: $2,482 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team. Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files: - 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year. - 7 of 60 files tested had inspections that were not performed annually. - 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection. During our testing of 60 HQS failed inspections, we noted the following in 8 files: - 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency). - 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection. - 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results. The samples were statistically valid samples. Questioned costs: $2,482 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team. Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s administrative plan, units sampled for quality control inspections must only include units that have been inspected within the preceding 3 months. Condition/Context: During our testing of 31 files for Quality-Control Inspection requirements, we noted the following in 2 files: - 2 of 31 inspections tested were performed more than 3 months after the initial inspection. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. Effect: The Authority is not in compliance with their Administrative Plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority review its process over quality-control inspections to ensure they are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s administrative plan, units sampled for quality control inspections must only include units that have been inspected within the preceding 3 months. Condition/Context: During our testing of 31 files for Quality-Control Inspection requirements, we noted the following in 2 files: - 2 of 31 inspections tested were performed more than 3 months after the initial inspection. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. Effect: The Authority is not in compliance with their Administrative Plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority review its process over quality-control inspections to ensure they are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s administrative plan, units sampled for quality control inspections must only include units that have been inspected within the preceding 3 months. Condition/Context: During our testing of 31 files for Quality-Control Inspection requirements, we noted the following in 2 files: - 2 of 31 inspections tested were performed more than 3 months after the initial inspection. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. Effect: The Authority is not in compliance with their Administrative Plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority review its process over quality-control inspections to ensure they are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: When a family has been selected from the waiting list, the PHA must notify the family (24 CFR 982.544(a)). Condition/Context: During our testing of 60 files for waiting list requirements, we noted the following in 2 files: - 2 out of 60 files did not include documentation that the Authority notified the applicant that their name had reached the top of the waiting list. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review its internal controls over the waiting list process to ensure all documentation is maintained at the time each applicant is selected from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: When a family has been selected from the waiting list, the PHA must notify the family (24 CFR 982.544(a)). Condition/Context: During our testing of 60 files for waiting list requirements, we noted the following in 2 files: - 2 out of 60 files did not include documentation that the Authority notified the applicant that their name had reached the top of the waiting list. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review its internal controls over the waiting list process to ensure all documentation is maintained at the time each applicant is selected from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: When a family has been selected from the waiting list, the PHA must notify the family (24 CFR 982.544(a)). Condition/Context: During our testing of 60 files for waiting list requirements, we noted the following in 2 files: - 2 out of 60 files did not include documentation that the Authority notified the applicant that their name had reached the top of the waiting list. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review its internal controls over the waiting list process to ensure all documentation is maintained at the time each applicant is selected from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 60 files for reporting and special test requirements, we noted the following in 6 files: - 6 out of 60 files were uploaded to the PIC system after the Authority was unable to locate them upon request by the auditors. The Auditors were unable to verify the upload due to delays in the system. The samples were statistically valid samples. Questioned costs: None Cause: The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Virginia Housing recognizes that staffing challenges, including the turnover of key personnel, have contributed to gaps in the PIC data submission process. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: We recommend that the Authority review its internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend that the Authority review its process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 60 files for reporting and special test requirements, we noted the following in 6 files: - 6 out of 60 files were uploaded to the PIC system after the Authority was unable to locate them upon request by the auditors. The Auditors were unable to verify the upload due to delays in the system. The samples were statistically valid samples. Questioned costs: None Cause: The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Virginia Housing recognizes that staffing challenges, including the turnover of key personnel, have contributed to gaps in the PIC data submission process. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: We recommend that the Authority review its internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend that the Authority review its process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 60 files for reporting and special test requirements, we noted the following in 6 files: - 6 out of 60 files were uploaded to the PIC system after the Authority was unable to locate them upon request by the auditors. The Auditors were unable to verify the upload due to delays in the system. The samples were statistically valid samples. Questioned costs: None Cause: The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Virginia Housing recognizes that staffing challenges, including the turnover of key personnel, have contributed to gaps in the PIC data submission process. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: We recommend that the Authority review its internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend that the Authority review its process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, 􀍆Special Tests and Provisions 􀌽 Selection from the Waiting List􀍇) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files: - 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058. - 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation. - 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18. - 1 of 60 files selected did not include the completed housing specialist checklist. The samples were statistically valid samples. Questioned costs: $12,622 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files. Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, 􀍆Special Tests and Provisions 􀌽 Selection from the Waiting List􀍇) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files: - 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058. - 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation. - 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18. - 1 of 60 files selected did not include the completed housing specialist checklist. The samples were statistically valid samples. Questioned costs: $12,622 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files. Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). (4) Use the Enterprise Income Verification (EIV) system in its entirety to verify tenant employment and income information during mandatory reexaminations of family composition and income in accordance with 24 CFR 5.233; and reduce administrative and subsidy payment errors in accordance with 24 CFR 5.236 and other administrative guidance issued by HUD. (5) Select tenants from the HCVP waiting list (see III.N.1, 􀍆Special Tests and Provisions 􀌽 Selection from the Waiting List􀍇) (24 CFR sections 982.202 through 982.207). (6) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition/Context: During our testing of 60 files for eligibility requirements, we noted the following in 9 files: - 5 of 60 files tested did not have proper supporting documentation for income reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for assets reported on the HUD-50058. - 1 of 60 files tested did not have proper supporting documentation for expenses/deductions reported on the HUD-50058. - 6 of 60 files tested had incorrectly calculated HAP due to missing or incorrect supporting documentation. - 2 of 60 files tested did not contain a HUD-9886 signed by all members of the household over 18. - 1 of 60 files selected did not include the completed housing specialist checklist. The samples were statistically valid samples. Questioned costs: $12,622 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 60 files reviewed by the audit team. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year over eligibility requirements. Prior year finding number was 2023-001 with exceptions related to internal controls and missing files. Recommendation: We recommend that the Authority reviews its internal controls and policies over HUD’s tenant eligibility requirements to ensure all documentation is maintained at the time of recertification. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition/Context: During our testing of 100 files for reasonable rent requirements, we noted the following in 4 files: - 4 of 100 files tested had a rent reasonableness determination performed after the effective date The samples were statistically valid samples. Questioned costs: $40,800 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 100 files reviewed by the audit team. Of the 100 files reviewed, four contained rent reasonableness determination documentation dated after the effective date. While this remains non-compliant, Virginia Housing views this as a positive indication of progress compared to previous audit findings. This improvement reflects the successful implementation of enhanced quality control measures, which have increased LHA file reviews and improved the correction of deficiencies. Effect: The Authority is not in compliance with HUD’s reasonable rent requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-002. Recommendation: We recommend that the Authority reviews its process over reasonable rent determination to ensure that it is performed timely (before the effective date of the rent payment) and that the approved rent is properly carried forward to the HUD-50058 and HAP contract/HAP contract amendment. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition/Context: During our testing of 100 files for reasonable rent requirements, we noted the following in 4 files: - 4 of 100 files tested had a rent reasonableness determination performed after the effective date The samples were statistically valid samples. Questioned costs: $40,800 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 100 files reviewed by the audit team. Of the 100 files reviewed, four contained rent reasonableness determination documentation dated after the effective date. While this remains non-compliant, Virginia Housing views this as a positive indication of progress compared to previous audit findings. This improvement reflects the successful implementation of enhanced quality control measures, which have increased LHA file reviews and improved the correction of deficiencies. Effect: The Authority is not in compliance with HUD’s reasonable rent requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-002. Recommendation: We recommend that the Authority reviews its process over reasonable rent determination to ensure that it is performed timely (before the effective date of the rent payment) and that the approved rent is properly carried forward to the HUD-50058 and HAP contract/HAP contract amendment. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must determine that the rent to the owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition/Context: During our testing of 100 files for reasonable rent requirements, we noted the following in 4 files: - 4 of 100 files tested had a rent reasonableness determination performed after the effective date The samples were statistically valid samples. Questioned costs: $40,800 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies have arisen in quality control practices. These variations stem from differences in agency size, staffing structures, geographic service areas, and overall program capacity. To address these challenges, the Authority has taken a methodical and intentional approach to improving the HCV program while balancing the need for timely compliance with federal regulations. As part of these efforts, quality control plans have been implemented to enhance program oversight. However, these plans were introduced after the audit review period and, therefore, were not applicable to the 100 files reviewed by the audit team. Of the 100 files reviewed, four contained rent reasonableness determination documentation dated after the effective date. While this remains non-compliant, Virginia Housing views this as a positive indication of progress compared to previous audit findings. This improvement reflects the successful implementation of enhanced quality control measures, which have increased LHA file reviews and improved the correction of deficiencies. Effect: The Authority is not in compliance with HUD’s reasonable rent requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-002. Recommendation: We recommend that the Authority reviews its process over reasonable rent determination to ensure that it is performed timely (before the effective date of the rent payment) and that the approved rent is properly carried forward to the HUD-50058 and HAP contract/HAP contract amendment. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files: - 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year. - 7 of 60 files tested had inspections that were not performed annually. - 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection. During our testing of 60 HQS failed inspections, we noted the following in 8 files: - 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency). - 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection. - 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results. The samples were statistically valid samples. Questioned costs: $2,482 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team. Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files: - 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year. - 7 of 60 files tested had inspections that were not performed annually. - 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection. During our testing of 60 HQS failed inspections, we noted the following in 8 files: - 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency). - 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection. - 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results. The samples were statistically valid samples. Questioned costs: $2,482 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team. Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Per the Authority's Administrative Plan, all units must pass an HQS inspection prior to the approval of a lease and at least once every 12 months during the term of the contract, and at other times as needed, to determine that the unit meets HQS (Chapter 8 of the Admin Plan). Per the Authority’s administrative plan, both the family and the owner must be given reasonable notice of all inspections. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition/Context: During our testing of 60 files for annual HQS annual inspection requirements, we noted the following in 12 files: - 3 of 60 files tested did not document the completion of an HQS inspection during the fiscal year. - 7 of 60 files tested had inspections that were not performed annually. - 4 of 60 files tested did not maintain documentation that the landlord and tenant were notified of the upcoming inspection. During our testing of 60 HQS failed inspections, we noted the following in 8 files: - 7 of 60 files tested had a reinspection that was not performed timely (30 days or 24 hours, depending on the cited deficiency). - 3 of 60 files tested where the Authority failed to process abatement of units after the second failed inspection. - 3 of 60 files tested where the Authority did not maintain documentation that the landlord and tenant were notified of the failed inspection results. The samples were statistically valid samples. Questioned costs: $2,482 Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. As part of these efforts, quality control plans have been implemented to ensure the timely and accurate completion of required inspections. In addition, the authority has acted by hiring a Housing Quality Officer and contracting with a third-party vender to conduct all required inspections for the program and enhance oversight of the inspection process (both previously shared with HUD). However, these plans were introduced after the audit review period and, therefore, were not applicable to the files reviewed by the audit team. Effect: The Authority is not in compliance with the HQS requirements set forth in the administrative plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority reviews its processes over annual and failed inspections to ensure that they are completed timely and in compliance with HUD’s requirements. We recommend the Authority review their procedures to ensure they are following up that the tenants or landlords are making corrections timely or properly abating HAP for the unit until corrections are made. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s administrative plan, units sampled for quality control inspections must only include units that have been inspected within the preceding 3 months. Condition/Context: During our testing of 31 files for Quality-Control Inspection requirements, we noted the following in 2 files: - 2 of 31 inspections tested were performed more than 3 months after the initial inspection. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. Effect: The Authority is not in compliance with their Administrative Plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority review its process over quality-control inspections to ensure they are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s administrative plan, units sampled for quality control inspections must only include units that have been inspected within the preceding 3 months. Condition/Context: During our testing of 31 files for Quality-Control Inspection requirements, we noted the following in 2 files: - 2 of 31 inspections tested were performed more than 3 months after the initial inspection. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. Effect: The Authority is not in compliance with their Administrative Plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority review its process over quality-control inspections to ensure they are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s administrative plan, units sampled for quality control inspections must only include units that have been inspected within the preceding 3 months. Condition/Context: During our testing of 31 files for Quality-Control Inspection requirements, we noted the following in 2 files: - 2 of 31 inspections tested were performed more than 3 months after the initial inspection. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. One significant challenge identified by LHAs is the capacity to conduct inspections, particularly for agencies located in rural areas, where coordinating all required inspections remained difficult. Effect: The Authority is not in compliance with their Administrative Plan. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-003. Recommendation: We recommend that the Authority review its process over quality-control inspections to ensure they are completed timely. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: When a family has been selected from the waiting list, the PHA must notify the family (24 CFR 982.544(a)). Condition/Context: During our testing of 60 files for waiting list requirements, we noted the following in 2 files: - 2 out of 60 files did not include documentation that the Authority notified the applicant that their name had reached the top of the waiting list. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review its internal controls over the waiting list process to ensure all documentation is maintained at the time each applicant is selected from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: When a family has been selected from the waiting list, the PHA must notify the family (24 CFR 982.544(a)). Condition/Context: During our testing of 60 files for waiting list requirements, we noted the following in 2 files: - 2 out of 60 files did not include documentation that the Authority notified the applicant that their name had reached the top of the waiting list. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review its internal controls over the waiting list process to ensure all documentation is maintained at the time each applicant is selected from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: When a family has been selected from the waiting list, the PHA must notify the family (24 CFR 982.544(a)). Condition/Context: During our testing of 60 files for waiting list requirements, we noted the following in 2 files: - 2 out of 60 files did not include documentation that the Authority notified the applicant that their name had reached the top of the waiting list. The samples were statistically valid samples. Questioned costs: None Cause: As a balance of state PHA, the Authority is responsible for ensuring the Housing Choice Voucher (HCV) program is administered in compliance with Federal regulations across Virginia. The Authority has partnered with 26 local housing agencies (LHAs) throughout the state to administer the program. However, due to the number of LHAs, inconsistencies in quality control practices have emerged. These variations result from differences in agency size, staffing structures, geographic service areas, and overall program capacity. The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the Authority review its internal controls over the waiting list process to ensure all documentation is maintained at the time each applicant is selected from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 60 files for reporting and special test requirements, we noted the following in 6 files: - 6 out of 60 files were uploaded to the PIC system after the Authority was unable to locate them upon request by the auditors. The Auditors were unable to verify the upload due to delays in the system. The samples were statistically valid samples. Questioned costs: None Cause: The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Virginia Housing recognizes that staffing challenges, including the turnover of key personnel, have contributed to gaps in the PIC data submission process. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: We recommend that the Authority review its internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend that the Authority review its process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 60 files for reporting and special test requirements, we noted the following in 6 files: - 6 out of 60 files were uploaded to the PIC system after the Authority was unable to locate them upon request by the auditors. The Auditors were unable to verify the upload due to delays in the system. The samples were statistically valid samples. Questioned costs: None Cause: The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Virginia Housing recognizes that staffing challenges, including the turnover of key personnel, have contributed to gaps in the PIC data submission process. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: We recommend that the Authority review its internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend that the Authority review its process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2023-2024 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA is required to submit the HUD-50058 form electronically to HUD each time the PHA completes an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. The PHA must also submit the Family Report when a family ends participation in the program or moves out of the PHA’s jurisdiction under portability (24 CFR Part 908 and 24 CFR section 982.158). Condition/Context: During our testing of 60 files for reporting and special test requirements, we noted the following in 6 files: - 6 out of 60 files were uploaded to the PIC system after the Authority was unable to locate them upon request by the auditors. The Auditors were unable to verify the upload due to delays in the system. The samples were statistically valid samples. Questioned costs: None Cause: The Authority has been actively working to improve the HCV program by taking a methodical approach, making intentional decisions about program enhancements while balancing the need for swift compliance with federal regulations. Virginia Housing recognizes that staffing challenges, including the turnover of key personnel, have contributed to gaps in the PIC data submission process. Effect: The Authority is not in compliance with HUD requirements. Repeat Finding: This finding is a repeat finding in the immediate prior year. Prior year finding number was 2023-001. Recommendation: We recommend that the Authority review its internal controls over the HAP process to ensure the correct amounts are paid each month. We recommend that the Authority review its process for uploading data to PIC to ensure each recertification gets submitted. Views of responsible officials: There is no disagreement with the audit finding.