Audit 367971

Finding No. 2024-001 – Special Tests and Provisions; Significant Deficiency (HCV Cluster #14.871 and #14.879) CONDITION: The Authority’s Section 8 Housing Choice Vouchers program changed bank accounts during 2024 and failed to enter into a general depository agreement in accordance with HUD regulations. CRITERIA: Federal funds held in the Section 8 Housing Choice Vouchers program are required to enter into general depository agreements with their financial institutions to serve as safeguards for federal funds and provide third party rights to HUD. QUESTIONED COSTS: The amount of questioned costs could not be determined. CONTEXT: No general depository agreement form was signed between the bank and the Authority. EFFECT: The federal funds CAUSE: The overall cause was a lack of quality control in understanding the importance of entering into a general depository agreement with their financial institution for federal funds. RECOMMENDATION: The Housing Authority should implement greater oversight over the Housing Choice Voucher Program compliance requirements and train employees on procedures mandated by HUD.

Finding No. 2024-002 – Reporting; Significant Deficiency (HCV Cluster #14.871 and #14.879) CONDITION: During a HUD Compliance Review performed in 2023, the results of several indicators of the Section 8 Management Assessment Program (SEMAP) were changed resulting in the Authority being designated as a Troubled Performer. As of December 31, 2024, The Authority continued its designation of a Troubled Performer. CRITERIA: When the Authority conducts its SEMAP, it should be properly documented how they selected sample sizes and the methods that were used to ensure that the items being tested were properly calculated. QUESTIONED COSTS: The amount of questioned costs could not be determined. CONTEXT: Several indicators were adjusted to reflect a score of 0, resulting in a Troubled Performer designation for fiscal year 2023 and 2024. EFFECT: By not properly conducting and documenting the SEMAP, the Housing Authority is labeled as a Troubled Performer. Additionally, the SEMAP is a good control tool to ensure that the HCV program is being conducted in accordance with HUD regulations. CAUSE: The overall cause was a lack of quality control in performing the SEMAP. RECOMMENDATION: The Housing Authority should develop better internal controls over the performance and documentation of SEMAP or consider outsourcing this to a reputable third party.

Finding No. 2024-003 – Special Tests and Provisions; Significant Deficiency (HCV Cluster #14.871 and #14.879) CONDITION: The Authority’s Section 8 Housing Choice Vouchers program does not have a board adopted Administrative Plan that reflects the order of preference of selecting applicants off the waiting list from the Mainstream Program. CRITERIA: When the Authority is awarded Mainstream vouchers, these vouchers must be used for new admissions to the program from the waiting list. The Authority must lease these vouchers by pulling the first Mainstream-eligible family from its tenant-based waiting list. The Authority is not permitted to reassign existing participants to the program in order to make regular tenant-based vouchers available. Further, the Authority may not skip over Mainstream-eligible families on the waiting list because the Authority is serving the required number of Mainstream families. QUESTIONED COSTS: The amount of questioned costs could not be determined. CONTEXT: A review of the Authority’s Administrative Plan revealed it has not been updated to reflect how Mainstream applicants are selected from the waiting list and at what preference. EFFECT: The Housing Authority could be admitting applicants not in the preferred order. CAUSE: The overall cause was a lack of quality control in understanding the importance of waiting list selections in accordance with preference structure of the Mainstream Program. RECOMMENDATION: The Housing Authority should adopt a board-approved Administrative Plan that properly defines how applicants are selected from the waiting list.

Finding No. 2024-001 – Special Tests and Provisions; Significant Deficiency (HCV Cluster #14.871 and #14.879) CONDITION: The Authority’s Section 8 Housing Choice Vouchers program changed bank accounts during 2024 and failed to enter into a general depository agreement in accordance with HUD regulations. CRITERIA: Federal funds held in the Section 8 Housing Choice Vouchers program are required to enter into general depository agreements with their financial institutions to serve as safeguards for federal funds and provide third party rights to HUD. QUESTIONED COSTS: The amount of questioned costs could not be determined. CONTEXT: No general depository agreement form was signed between the bank and the Authority. EFFECT: The federal funds CAUSE: The overall cause was a lack of quality control in understanding the importance of entering into a general depository agreement with their financial institution for federal funds. RECOMMENDATION: The Housing Authority should implement greater oversight over the Housing Choice Voucher Program compliance requirements and train employees on procedures mandated by HUD.

Finding No. 2024-002 – Reporting; Significant Deficiency (HCV Cluster #14.871 and #14.879) CONDITION: During a HUD Compliance Review performed in 2023, the results of several indicators of the Section 8 Management Assessment Program (SEMAP) were changed resulting in the Authority being designated as a Troubled Performer. As of December 31, 2024, The Authority continued its designation of a Troubled Performer. CRITERIA: When the Authority conducts its SEMAP, it should be properly documented how they selected sample sizes and the methods that were used to ensure that the items being tested were properly calculated. QUESTIONED COSTS: The amount of questioned costs could not be determined. CONTEXT: Several indicators were adjusted to reflect a score of 0, resulting in a Troubled Performer designation for fiscal year 2023 and 2024. EFFECT: By not properly conducting and documenting the SEMAP, the Housing Authority is labeled as a Troubled Performer. Additionally, the SEMAP is a good control tool to ensure that the HCV program is being conducted in accordance with HUD regulations. CAUSE: The overall cause was a lack of quality control in performing the SEMAP. RECOMMENDATION: The Housing Authority should develop better internal controls over the performance and documentation of SEMAP or consider outsourcing this to a reputable third party.

Finding No. 2024-003 – Special Tests and Provisions; Significant Deficiency (HCV Cluster #14.871 and #14.879) CONDITION: The Authority’s Section 8 Housing Choice Vouchers program does not have a board adopted Administrative Plan that reflects the order of preference of selecting applicants off the waiting list from the Mainstream Program. CRITERIA: When the Authority is awarded Mainstream vouchers, these vouchers must be used for new admissions to the program from the waiting list. The Authority must lease these vouchers by pulling the first Mainstream-eligible family from its tenant-based waiting list. The Authority is not permitted to reassign existing participants to the program in order to make regular tenant-based vouchers available. Further, the Authority may not skip over Mainstream-eligible families on the waiting list because the Authority is serving the required number of Mainstream families. QUESTIONED COSTS: The amount of questioned costs could not be determined. CONTEXT: A review of the Authority’s Administrative Plan revealed it has not been updated to reflect how Mainstream applicants are selected from the waiting list and at what preference. EFFECT: The Housing Authority could be admitting applicants not in the preferred order. CAUSE: The overall cause was a lack of quality control in understanding the importance of waiting list selections in accordance with preference structure of the Mainstream Program. RECOMMENDATION: The Housing Authority should adopt a board-approved Administrative Plan that properly defines how applicants are selected from the waiting list.