Audit 362811

Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Number: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions – Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency 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 on discussion with management, there were newly leased units for which rent reasonableness evaluations were not performed. Context: There were approximately thirty two (32) newly leased Housing Voucher Cluster units. Of a sample size of four (4) newly leased units, rent reasonableness evaluation for one (1) unit was not performed. Our sample size is statistically valid. Known Questioned Costs: $7,744 Cause: There is a significant deficiency for the Housing Voucher Cluster 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 programs are in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the deficiencies in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Number: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions – Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency 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 on discussion with management, there were newly leased units for which rent reasonableness evaluations were not performed. Context: There were approximately thirty two (32) newly leased Housing Voucher Cluster units. Of a sample size of four (4) newly leased units, rent reasonableness evaluation for one (1) unit was not performed. Our sample size is statistically valid. Known Questioned Costs: $7,744 Cause: There is a significant deficiency for the Housing Voucher Cluster 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 programs are in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the deficiencies in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Number: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions – Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency 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 on discussion with management, there were newly leased units for which rent reasonableness evaluations were not performed. Context: There were approximately thirty two (32) newly leased Housing Voucher Cluster units. Of a sample size of four (4) newly leased units, rent reasonableness evaluation for one (1) unit was not performed. Our sample size is statistically valid. Known Questioned Costs: $7,744 Cause: There is a significant deficiency for the Housing Voucher Cluster 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 programs are in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the deficiencies in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.

Finding 2024-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers and Mainstream Vouchers Programs Federal Assistance Listing Number: 14.871 and 14.879 Noncompliance – N. Special Tests and Provisions – Reasonable Rent Non Compliance Material to the Financial Statements: No Significant Deficiency 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 on discussion with management, there were newly leased units for which rent reasonableness evaluations were not performed. Context: There were approximately thirty two (32) newly leased Housing Voucher Cluster units. Of a sample size of four (4) newly leased units, rent reasonableness evaluation for one (1) unit was not performed. Our sample size is statistically valid. Known Questioned Costs: $7,744 Cause: There is a significant deficiency for the Housing Voucher Cluster 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 programs are in compliance. Effect: The Housing Voucher Cluster is in non-compliance with the special tests and provisions type of compliance related to reasonable rent. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority has recognized the deficiencies in the Housing Voucher Cluster and will implement internal control procedures that will ensure compliance with federal regulations.