Finding 2024-002:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program, Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.850, 14.871
Noncompliance – N. Special Tests and Provisions – Depository Agreements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: PHAs are required to enter into depository agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC). Condition: Based on inspection of files and discussions with management, it was determined that depository agreements were not on file during the time of audit.
Context: The Authority did not have depository agreements with their financial institutions on file during the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements.
Cause: There is a significant deficiency in internal controls over compliance for the special tests and provision type of compliance related to depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered management company that assures the program is in compliance.
Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs are in non-compliance with the special tests and provisions type of compliance related to depository agreements.
Recommendation: We recommend that the Authority properly file HUD-51999 forms in accordance with HUD guidelines.
Authority Response: The Authority accepts the recommendation of the auditor and will properly file HUD-51999 forms in accordance with HUD guidelines.
Finding 2024-004:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Assistance Listing Numbers: 14.871
Noncompliance – N. Special Tests and Provisions - Reasonable Rent
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority 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 Authority 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: Based upon inspection of the Authority’s files and discussion with management, there were newly leased units for which the evaluation of rent reasonableness was not performed.
Context: There were approximately 6 newly leased units. Of a sample size of one (1) newly leased unit, one (1) unit's documentation of reasonable rent was not available for examination.
Our sample size is statistically valid.
Known Questioned Costs: $8,661
Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Recommendation: We recommend the Authority design and implement internal control procedures related to reasonable rent that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers Program and will implement internal control procedures related to reasonable rent that will ensure compliance with federal regulations.
Effect: The Section 8 Housing Choice Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to reasonable rent.
Finding 2024-005:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Assistance Listing Numbers: 14.871
Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension.
Condition: Based upon inspection of the Authority’s files and on discussion with management, the Authority did not properly abate or provide proper extension documentation for failed inspections selected for testing.
Context: The Authority did not provide proper extension documentation or properly abate four (4) out of nine (9) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b).
Known Questioned Costs: $9,282
Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Voucher Program is in material non-compliance with the special tests and provisions type of compliance related to HQS enforcement.
Recommendation: We recommend the Authority design and implement internal control procedures related to HQS enforcement that will reasonably assure compliance with the Uniform Guidance and the
compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Voucher Program and will implement internal control procedures related to HQS enforcement that will ensure compliance with federal regulations.
Finding 2024-006:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Assistance Listing Numbers: 14.871
Noncompliance – N. Special Tests and Provisions – Utility Allowance Schedule
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Utility Allowance Schedule. The PHA must maintain an up-to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517).
Condition: Based on inspection of files and discussions with management, it was determined that the Authority did not have up-to-date utility allowance schedules on file.
Context: The utility allowance schedules that the Authority has on file have not been updated since 2018. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to the utility allowance schedules. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Voucher Program is in non-compliance with the special tests and provisions type of compliance related to the utility allowance schedules.
Recommendation: We recommend that the Authority updates the utility allowance schedules annually that will assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: The Authority has recognized the significant deficiency in the Section 8 Housing Choice Voucher Program and will update the utility allowance schedules annually in accordance with HUD guidelines.
Finding 2024-001:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program
Federal Assistance Listing Numbers: 14.850
Noncompliance – N. Special Tests and Provisions - Recording of Declarations of Trust/Declaration of Restrictive Covenants Against Public Housing Property
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: A current Declaration of Trust ("DOT"), in a form acceptable to HUD, must be recorded against all public housing property owned by PHAs (or private entities for public housing developed under 24 CFR Part 905, Subpart F) that has been acquired, developed, maintained, or assisted with funds from the US Housing Act of 1937. A DOT is a legal instrument that grants HUD an interest in public housing property. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were properties that the Authority owns and insures that did not have DOTs on file during the time of audit. Context: The Authority owns three (3) public housing properties. During the audit, it was noted that three
(3) out of three (3) public housing properties did not have DOTs on file. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to the recording of DOTs against public housing property. The Authority has not properly filed DOTs in compliance with program requirements.
Effect: The Public and Indian Housing Program is in non-compliance with the special tests and provisions type of compliance related to the recording of DOTs against public housing property.
Recommendation: We recommend that the Authority files proper DOTs on the public housing properties.
Authority Response: The Authority accepts the recommendation of the auditor and will ensure all necessary DOTs are recorded.
Finding 2024-002:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program, Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.850, 14.871
Noncompliance – N. Special Tests and Provisions – Depository Agreements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: PHAs are required to enter into depository agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC). Condition: Based on inspection of files and discussions with management, it was determined that depository agreements were not on file during the time of audit.
Context: The Authority did not have depository agreements with their financial institutions on file during the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements.
Cause: There is a significant deficiency in internal controls over compliance for the special tests and provision type of compliance related to depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered management company that assures the program is in compliance.
Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs are in non-compliance with the special tests and provisions type of compliance related to depository agreements.
Recommendation: We recommend that the Authority properly file HUD-51999 forms in accordance with HUD guidelines.
Authority Response: The Authority accepts the recommendation of the auditor and will properly file HUD-51999 forms in accordance with HUD guidelines.
Finding 2024-003:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program
Federal Assistance Listing Numbers: 14.850
Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy.
Context: Two (2) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that two (2) out of two (2) new move-ins selected could not be traced with certainty back to the Authority's waiting list.
Known Questioned Costs: $8,691. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Public and Indian Housing Program is in material non-compliance with the special tests and provisions type of compliance related to selections from the waiting list.
Recommendation: We recommend the Authority design and implement internal control procedures related to selections from the waiting list that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures related to selections from the waiting list that will ensure compliance with federal regulations.
Finding 2024-002:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program, Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.850, 14.871
Noncompliance – N. Special Tests and Provisions – Depository Agreements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: PHAs are required to enter into depository agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC). Condition: Based on inspection of files and discussions with management, it was determined that depository agreements were not on file during the time of audit.
Context: The Authority did not have depository agreements with their financial institutions on file during the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements.
Cause: There is a significant deficiency in internal controls over compliance for the special tests and provision type of compliance related to depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered management company that assures the program is in compliance.
Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs are in non-compliance with the special tests and provisions type of compliance related to depository agreements.
Recommendation: We recommend that the Authority properly file HUD-51999 forms in accordance with HUD guidelines.
Authority Response: The Authority accepts the recommendation of the auditor and will properly file HUD-51999 forms in accordance with HUD guidelines.
Finding 2024-004:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Assistance Listing Numbers: 14.871
Noncompliance – N. Special Tests and Provisions - Reasonable Rent
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Reasonable Rent. The Authority must do the following: The Authority must determine that the rent to owner is reasonable at the time of initial leasing. Also, the Authority 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 Authority 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: Based upon inspection of the Authority’s files and discussion with management, there were newly leased units for which the evaluation of rent reasonableness was not performed.
Context: There were approximately 6 newly leased units. Of a sample size of one (1) newly leased unit, one (1) unit's documentation of reasonable rent was not available for examination.
Our sample size is statistically valid.
Known Questioned Costs: $8,661
Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to reasonable rent. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Recommendation: We recommend the Authority design and implement internal control procedures related to reasonable rent that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers Program and will implement internal control procedures related to reasonable rent that will ensure compliance with federal regulations.
Effect: The Section 8 Housing Choice Vouchers program is in material non-compliance with the special tests and provisions type of compliance related to reasonable rent.
Finding 2024-005:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Assistance Listing Numbers: 14.871
Noncompliance – N. Special Tests and Provisions – Housing Quality Standards (HQS) Enforcement
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: HQS Enforcement. For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct all life threatening HQS deficiencies within 24 hours after the inspections and all other deficiencies within 30 days or within a specified PHA-approved extension.
Condition: Based upon inspection of the Authority’s files and on discussion with management, the Authority did not properly abate or provide proper extension documentation for failed inspections selected for testing.
Context: The Authority did not provide proper extension documentation or properly abate four (4) out of nine (9) failed inspections selected for testing. As a result, the Authority was not in compliance with the HQS as required by 24 CFR sections 982.158(d) and 982.405(b).
Known Questioned Costs: $9,282
Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to HQS enforcement. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Voucher Program is in material non-compliance with the special tests and provisions type of compliance related to HQS enforcement.
Recommendation: We recommend the Authority design and implement internal control procedures related to HQS enforcement that will reasonably assure compliance with the Uniform Guidance and the
compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Section 8 Housing Choice Voucher Program and will implement internal control procedures related to HQS enforcement that will ensure compliance with federal regulations.
Finding 2024-006:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Section 8 Housing Choice Vouchers Program
Federal Assistance Listing Numbers: 14.871
Noncompliance – N. Special Tests and Provisions – Utility Allowance Schedule
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Utility Allowance Schedule. The PHA must maintain an up-to-date utility allowance schedule. The PHA must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517).
Condition: Based on inspection of files and discussions with management, it was determined that the Authority did not have up-to-date utility allowance schedules on file.
Context: The utility allowance schedules that the Authority has on file have not been updated since 2018. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to the utility allowance schedules. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Section 8 Housing Choice Voucher Program is in non-compliance with the special tests and provisions type of compliance related to the utility allowance schedules.
Recommendation: We recommend that the Authority updates the utility allowance schedules annually that will assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: The Authority has recognized the significant deficiency in the Section 8 Housing Choice Voucher Program and will update the utility allowance schedules annually in accordance with HUD guidelines.
Finding 2024-001:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program
Federal Assistance Listing Numbers: 14.850
Noncompliance – N. Special Tests and Provisions - Recording of Declarations of Trust/Declaration of Restrictive Covenants Against Public Housing Property
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: A current Declaration of Trust ("DOT"), in a form acceptable to HUD, must be recorded against all public housing property owned by PHAs (or private entities for public housing developed under 24 CFR Part 905, Subpart F) that has been acquired, developed, maintained, or assisted with funds from the US Housing Act of 1937. A DOT is a legal instrument that grants HUD an interest in public housing property. Condition: Based upon inspection of the Authority’s files and on discussion with management, there were properties that the Authority owns and insures that did not have DOTs on file during the time of audit. Context: The Authority owns three (3) public housing properties. During the audit, it was noted that three
(3) out of three (3) public housing properties did not have DOTs on file. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to the recording of DOTs against public housing property. The Authority has not properly filed DOTs in compliance with program requirements.
Effect: The Public and Indian Housing Program is in non-compliance with the special tests and provisions type of compliance related to the recording of DOTs against public housing property.
Recommendation: We recommend that the Authority files proper DOTs on the public housing properties.
Authority Response: The Authority accepts the recommendation of the auditor and will ensure all necessary DOTs are recorded.
Finding 2024-002:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program, Section 8 Housing Choice Vouchers Program Federal Assistance Listing Numbers: 14.850, 14.871
Noncompliance – N. Special Tests and Provisions – Depository Agreements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: PHAs are required to enter into depository agreements with their financial institution using the HUD-51999 (OMB No. 2577-0075) or a form required by HUD in the ACC. The agreements serve as safe guards for Federal funds and provide third-party rights to HUD (Section 9 of the ACC). Condition: Based on inspection of files and discussions with management, it was determined that depository agreements were not on file during the time of audit.
Context: The Authority did not have depository agreements with their financial institutions on file during the time of audit. We were unable to verify the existence of depository agreements and unable to determine if the Authority met the terms of the agreements.
Cause: There is a significant deficiency in internal controls over compliance for the special tests and provision type of compliance related to depository agreements. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls for their partnered management company that assures the program is in compliance.
Effect: The Public and Indian Housing and Section 8 Housing Choice Vouchers Programs are in non-compliance with the special tests and provisions type of compliance related to depository agreements.
Recommendation: We recommend that the Authority properly file HUD-51999 forms in accordance with HUD guidelines.
Authority Response: The Authority accepts the recommendation of the auditor and will properly file HUD-51999 forms in accordance with HUD guidelines.
Finding 2024-003:
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public and Indian Housing Program
Federal Assistance Listing Numbers: 14.850
Noncompliance – N. Special Tests and Provisions – Selections from the Waiting List
Non Compliance Material to the Financial Statements: Yes
Material Weakness in Internal Control over Compliance for Special Tests and Provisions
Criteria: Selections from the Waiting List. The PHA must have written policies in its Admissions and Continued Occupancy Policy for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203(Special admission (non-waiting list)), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207).
Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with certainty that new move-ins were selected from the wait list in an order that is in accordance with the Authority’s policy.
Context: Two (2) names were selected from the new move-in list and those names were to be traced to the waiting list to verify new move-ins were chosen in an order that was in accordance with the Authority’s policy. It was determined that two (2) out of two (2) new move-ins selected could not be traced with certainty back to the Authority's waiting list.
Known Questioned Costs: $8,691. Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selections from the waiting list. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance.
Effect: The Public and Indian Housing Program is in material non-compliance with the special tests and provisions type of compliance related to selections from the waiting list.
Recommendation: We recommend the Authority design and implement internal control procedures related to selections from the waiting list that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.
Authority Response: The Authority has recognized the material weakness in the Public and Indian Housing Program and will implement internal control procedures related to selections from the waiting list that will ensure compliance with federal regulations.