Audit 367267

2024 -001 – SPECIAL TESTS AND PROVISIONS – HQS ENFORCEMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871 – Housing Voucher Cluster CRITERIA The PHA must not make any housing assistance payments for a dwelling unit that fails to meet the HQS, unless the owner corrects the defect within the period specified by the PHA and the PHA verifies the correction. If a defect is life threatening, the owner must correct the defect within no more than 24 hours. For other defects, the owner must correct the defect within no more than 30 calendar days (or any PHA-approved extension). (24 CFR 982.404 (a) (3)) A PHA may withhold assistance payments for units that have HQS deficiencies once the PHA has notified the owner in writing of the deficiencies. The PHA must identify in its Administrative Plan the conditions under which it will withhold HAP. If the unit is brought into compliance during the applicable cure period (within 24 hours of notification for life- threatening deficiencies and within 30 days of notification (or other reasonable period established by the PHA) for non-life-threatening deficiencies), …The PHA must abate the HAP, including amounts that had been withheld, if the owner fails to make the repairs within the applicable cure period (within 24 hours of notification for life-threatening deficiencies and within 30 days of notification (or other reasonable period established by the PHA) for non-life- threatening deficiencies).(24 CFR 982.404 (d)) CONDITION We selected a sample of 40 failed HQS inspections during the year. In 31 out of the 40 failed HQS inspections, the PHA re-inspection did not occur within 30 days. In 2 of the 40, we were not provided with documentation showing the unit passed HQS. CAUSE Procedures were not in place to properly document the corrections of deficiencies and abate the housing assistance payments when necessary. EFFECT The Authority may have made housing assistance payments to landlords for units that failed to meet housing quality standards or failed to properly abate HAP in cases where HQS deficiencies were not corrected in a timely manner. QUESTIONED COSTS None Identified. CONTEXT There were 416 failed HQS inspections for the Housing Choice Voucher Program during 2024. We selected a sample of 40 failed HQS inspections. This was not a statistically valid sample. REPEAT FINDING Repeated from finding 2023-002. RECOMMENDATION We recommend that procedures be strengthened to ensure that documentation is maintained for all inspections and enforcements. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2024 -002 – SPECIAL TESTS AND PROVISIONS – HOUSING ASSISTANCE PAYMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871 – Housing Voucher Cluster CRITERIA During the term of each assisted lease, and for at least three years thereafter, the PHA must keep: (1) A copy of the executed lease; (2) The HAP contract; and (3) The application from the family. (24 CFR 982.158 (e) The PHA may not pay any housing assistance payment to the owner until the HAP contract has been executed. (24 CFR 982.305 (c)(2)). CONDITION We selected a sample of 25 participants in the Housing Choice Voucher Program. We identified 5 instances in which the HAP contract was not properly executed by either the landlord or the PHA. CAUSE Procedures were not in place to ensure that the Authority obtained fully executed copies of the HAP contracts. EFFECT The Authority made housing assistance payments to landlords when it did not have fully executed HAP contracts. QUESTIONED COSTS Known questioned costs of $69,797 represent the aggregate housing assistance payments made in these 5 instances during 2024 in which the Authority did not have fully executed HAP contracts. CONTEXT The Authority administered approximately 760 vouchers in the Housing Choice Voucher Program during 2024. We selected a sample of 25 program participants. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority review all program participant files to ensure that they have a fully executed HAP contract. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2024 -003 – CASH MANAGEMENT Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund CRITERIA For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. (2 CFR 200.305 (b)) Once funds are disbursed, i.e. transferred from LOCCS to the PHA’s bank account, the PHA must pay the applicable bill(s) within 3 business days after the deposit of the funds into the PHA’s bank account. (HUD Capital Fund Guidebook; Section 7.9) CONDITION We selected a sample of 4 drawdowns of capital funds from ELOCCs during the year. We identified 1 instance in which the Authority did not process payment to the vendor within 3 business days of receiving the funds. CAUSE The Authority does not have sufficient procedures in place to coordinate the timing of drawdowns with disbursement schedules. EFFECT Federal funds were held in excess of immediate cash requirements, which is not in compliance with Uniform Guidance cash management requirements. QUESTIONED COSTS None Identified. CONTEXT The Authority had 8 drawdowns of capital funds during the year. We selected a sample of 4 drawdowns during the year. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority utilize the reimbursement method and process payment to the vendor before requisitioning funds from ELOCCs. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2024 -004 – PROCUREMENT, SUSPENSION, AND DEBARMENT Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development ALN #: 14.850 – Public Housing Operating Fund CRITERIA For any amounts above the Petty Cash ceiling, but not exceeding $250,000 in accordance with revisions to 2CFR 200.67 and 2 CFR 200.88, the NBHA may use small purchase procedures. Under small purchase procedures, the NBHA shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $10,000, per NDAA Section 806 also known as Micro Purchases, only one quote is required provided the quote is reasonable. CONDITION We identified 4 instances in which sufficient documentation was not maintained to support the procurement of a vendor. CAUSE The Authority was in the process of implementing their corrective action plan from the prior year. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS Known Questioned Costs - $246,133, representing the aggregate payments to these four vendors. CONTEXT All purchases are required to be made in accordance with the Authority’s procurement policy. There were approximately 60 vendors paid in excess of the micro purchase threshold. We selected a sample of 10 vendors. This was not a statistically valid sample. REPEAT FINDING Repeated from Finding 2023-003. RECOMMENDATION We recommend that the Authority continue with their corrective action plan from the prior year. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2024 -005 – PERIOD OF PERFORMANCE Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund CRITERIA Capital Funds identified in the PHA's CFP 5-Year Action Plan to be transferred to operations are obligated by the PHA once the funds have been budgeted and drawn down by the PHA. Capital Funds transferred to operations (BLI 1406) are not considered obligated until the PHA has budgeted and drawn down the funds. To meet this requirement, the funds must be budgeted in line BLI 1406 (Operations) and the PHA must submit the voucher request in LOCCS. (24 CFR Section 905.314(I)). CONDITION The Authority had obligated capital funds related to operations (BLI 1406) for Capital Fund years 2020 and 2022 prior to the voucher request date for these draws. CAUSE Management was unaware of this requirement. EFFECT The Authority had obligated funds for operations prior to the voucher request date of these draws. This inhibits HUD’s review of outstanding obligations and expenditures for the Capital Fund Program. QUESTIONED COSTS None Identified. CONTEXT The Authority had six open capital fund grants during fiscal year 2024 (Capital Fund years 2019-2024). The Authority obligated the BLI 1406 funding for Capital Fund 2020 in March 2024 and Capital Fund 2022 in May 2024. The Authority submitted the voucher requests in February 2025. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Authority strengthen its grant management procedures by implementing a tracking system for grant deadlines and obligation dates. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.