Audit 359044

Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria The OMB Compliance Supplement for the Housing Voucher Cluster requires that grantees must establish and follow their own written procedures for selecting applicants from the waiting list. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance forcompliance. The Council’s established policies require the use of a multi-tiered scoring system that assigns a numeric value to each applicant on the waiting list. When open vouchers are available, the policy requires selection in the order of score, with applicants having the same score being selected randomly. Condition During our audit testing, we inspected the Council’s waiting list as of the beginning of fiscal year 2024 and noted that all Housing Choice Voucher (HCV) applicants were assigned a score of zero. Cause A software user error when setting the waiting list caused all HCV applicants to not be assigned a score based on the established criteria. Effect As described above, applicants with identical scores are selected at random. Thus, in fiscal year 2024, all applicants admitted to program from the waiting list were effectively selected at random. Recommendation We noted that management detected this software error and corrected it subsequent to fiscal year 2024 and before the performance of our audit procedures. We recommend that management establish review procedures to ensure that automated processes are being performed in accordance with established policies and procedures. Management’s Response We agree with the finding and intend to incorporate a manual review of the selection process each time selections are made from the waiting list.

Item 2024-003 Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria 24 CFR 982.305(a) requires that grantees may not begin providing housing assistance payments for an applicant until certain criteria are met, which includes that the housing unit has passed a Housing Quality Inspection conducted by the grantee. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance for compliance. Condition During our audit testing, we haphazardly selected a sample of 40 newly admitted tenants to determine if the admission criteria were met. Of those 40 tenants, we identified 6 instances where the initial inspection was either not conducted or not conducted before the move-in date. Cause The Council’s established procedures did not include sufficient controls to ensure that the criteria were met in accordance with policy and regulation before the housing assistance payments were authorized. Effect The Council was not in compliance with these program requirements. Recommendation We recommend that management strengthen controls to ensure that housing assistance payments are not authorized before the required criteria are met. Ideally, this would include changes to the authorization process that prevent authorization from being made without the review having been completed. Management’s Response We agree with the finding. We have provided communication and training to caseworkers, inspectors, and property managers regarding the program requirements, and we intend to develop additional procedures to review compliance.

Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria The OMB Compliance Supplement for the Housing Voucher Cluster requires that grantees must establish and follow their own written procedures for selecting applicants from the waiting list. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance forcompliance. The Council’s established policies require the use of a multi-tiered scoring system that assigns a numeric value to each applicant on the waiting list. When open vouchers are available, the policy requires selection in the order of score, with applicants having the same score being selected randomly. Condition During our audit testing, we inspected the Council’s waiting list as of the beginning of fiscal year 2024 and noted that all Housing Choice Voucher (HCV) applicants were assigned a score of zero. Cause A software user error when setting the waiting list caused all HCV applicants to not be assigned a score based on the established criteria. Effect As described above, applicants with identical scores are selected at random. Thus, in fiscal year 2024, all applicants admitted to program from the waiting list were effectively selected at random. Recommendation We noted that management detected this software error and corrected it subsequent to fiscal year 2024 and before the performance of our audit procedures. We recommend that management establish review procedures to ensure that automated processes are being performed in accordance with established policies and procedures. Management’s Response We agree with the finding and intend to incorporate a manual review of the selection process each time selections are made from the waiting list.

Item 2024-003 Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria 24 CFR 982.305(a) requires that grantees may not begin providing housing assistance payments for an applicant until certain criteria are met, which includes that the housing unit has passed a Housing Quality Inspection conducted by the grantee. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance for compliance. Condition During our audit testing, we haphazardly selected a sample of 40 newly admitted tenants to determine if the admission criteria were met. Of those 40 tenants, we identified 6 instances where the initial inspection was either not conducted or not conducted before the move-in date. Cause The Council’s established procedures did not include sufficient controls to ensure that the criteria were met in accordance with policy and regulation before the housing assistance payments were authorized. Effect The Council was not in compliance with these program requirements. Recommendation We recommend that management strengthen controls to ensure that housing assistance payments are not authorized before the required criteria are met. Ideally, this would include changes to the authorization process that prevent authorization from being made without the review having been completed. Management’s Response We agree with the finding. We have provided communication and training to caseworkers, inspectors, and property managers regarding the program requirements, and we intend to develop additional procedures to review compliance.

Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria The OMB Compliance Supplement for the Housing Voucher Cluster requires that grantees must establish and follow their own written procedures for selecting applicants from the waiting list. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance forcompliance. The Council’s established policies require the use of a multi-tiered scoring system that assigns a numeric value to each applicant on the waiting list. When open vouchers are available, the policy requires selection in the order of score, with applicants having the same score being selected randomly. Condition During our audit testing, we inspected the Council’s waiting list as of the beginning of fiscal year 2024 and noted that all Housing Choice Voucher (HCV) applicants were assigned a score of zero. Cause A software user error when setting the waiting list caused all HCV applicants to not be assigned a score based on the established criteria. Effect As described above, applicants with identical scores are selected at random. Thus, in fiscal year 2024, all applicants admitted to program from the waiting list were effectively selected at random. Recommendation We noted that management detected this software error and corrected it subsequent to fiscal year 2024 and before the performance of our audit procedures. We recommend that management establish review procedures to ensure that automated processes are being performed in accordance with established policies and procedures. Management’s Response We agree with the finding and intend to incorporate a manual review of the selection process each time selections are made from the waiting list.

Item 2024-003 Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria 24 CFR 982.305(a) requires that grantees may not begin providing housing assistance payments for an applicant until certain criteria are met, which includes that the housing unit has passed a Housing Quality Inspection conducted by the grantee. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance for compliance. Condition During our audit testing, we haphazardly selected a sample of 40 newly admitted tenants to determine if the admission criteria were met. Of those 40 tenants, we identified 6 instances where the initial inspection was either not conducted or not conducted before the move-in date. Cause The Council’s established procedures did not include sufficient controls to ensure that the criteria were met in accordance with policy and regulation before the housing assistance payments were authorized. Effect The Council was not in compliance with these program requirements. Recommendation We recommend that management strengthen controls to ensure that housing assistance payments are not authorized before the required criteria are met. Ideally, this would include changes to the authorization process that prevent authorization from being made without the review having been completed. Management’s Response We agree with the finding. We have provided communication and training to caseworkers, inspectors, and property managers regarding the program requirements, and we intend to develop additional procedures to review compliance.

Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria The OMB Compliance Supplement for the Housing Voucher Cluster requires that grantees must establish and follow their own written procedures for selecting applicants from the waiting list. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance forcompliance. The Council’s established policies require the use of a multi-tiered scoring system that assigns a numeric value to each applicant on the waiting list. When open vouchers are available, the policy requires selection in the order of score, with applicants having the same score being selected randomly. Condition During our audit testing, we inspected the Council’s waiting list as of the beginning of fiscal year 2024 and noted that all Housing Choice Voucher (HCV) applicants were assigned a score of zero. Cause A software user error when setting the waiting list caused all HCV applicants to not be assigned a score based on the established criteria. Effect As described above, applicants with identical scores are selected at random. Thus, in fiscal year 2024, all applicants admitted to program from the waiting list were effectively selected at random. Recommendation We noted that management detected this software error and corrected it subsequent to fiscal year 2024 and before the performance of our audit procedures. We recommend that management establish review procedures to ensure that automated processes are being performed in accordance with established policies and procedures. Management’s Response We agree with the finding and intend to incorporate a manual review of the selection process each time selections are made from the waiting list.

Item 2024-003 Assistance Listing Numbers: 14.871, 14.879 – Housing Voucher Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-through Entity: N/A Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Special Tests and Provisions Questioned Costs: None Criteria 24 CFR 982.305(a) requires that grantees may not begin providing housing assistance payments for an applicant until certain criteria are met, which includes that the housing unit has passed a Housing Quality Inspection conducted by the grantee. 2 CFR 200 requires that internal control over compliance be established to provide reasonable assurance for compliance. Condition During our audit testing, we haphazardly selected a sample of 40 newly admitted tenants to determine if the admission criteria were met. Of those 40 tenants, we identified 6 instances where the initial inspection was either not conducted or not conducted before the move-in date. Cause The Council’s established procedures did not include sufficient controls to ensure that the criteria were met in accordance with policy and regulation before the housing assistance payments were authorized. Effect The Council was not in compliance with these program requirements. Recommendation We recommend that management strengthen controls to ensure that housing assistance payments are not authorized before the required criteria are met. Ideally, this would include changes to the authorization process that prevent authorization from being made without the review having been completed. Management’s Response We agree with the finding. We have provided communication and training to caseworkers, inspectors, and property managers regarding the program requirements, and we intend to develop additional procedures to review compliance.