Audit 369097

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Eligibility The PHA must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: The Agency did not have adequate internal controls designed to ensure that reexaminations of family income and composition were performed at least once every 12 months. Questioned Costs: $251,056 Context: Testing of 60 HCVP files indicated that 23 instances where the annual recertification was not processed within regulatory period of 12 months. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months. Repeat Finding: Yes, (2023-002) Recommendation: We recommend that management should implement a quality control review over a sampling of tenant files recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: The Agency did not have adequate internal controls designed to ensure that failed inspections are were completed in accordance with compliance requirements. Questioned Costs: $1,479 Context: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted in 1 of 40 files: -Inspection was cancelled, and in the process of rescheduling, it was not rescheduled for reinspection in a timely manner. Cause: The Agency failed to follow their HQS Enforcement procedures. Effect: The Agency was not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Repeat Finding: Yes, (2023-003) Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not meet requirements associated with HQS housing inspections. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871/14.879 Federal Award Identification Number and Year: CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: Special Tests and Provisions-Housing Quality Standards Enforcement The PHA must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: The Agency did not have adequate internal controls designed to ensure that NSPIRE inspections were completed in accordance with compliance requirements. Questioned Costs: None Context: During the testing of 60 inspections, 1 instance was noted where no annual inspection had been completed since November 2022. Cause: The Agency failed to follow their inspection procedures. Effect: The Agency is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for a unit that did not meet these standards. Repeat Finding: No Recommendation: We recommend that the Agency review the controls in place to ensure that the inspections team can complete the reinspections in a timely manner and are knowledgeable of all internal procedures in place over inspections. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: CA005/CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Eligibility The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification (24 CFR sections 960.253, 960.257, and 960.259). Condition: The Agency did not have adequate internal controls designed to ensure eligibility requirements were being met for City and County. Questioned Costs: Unable to determine. Context: During the testing of the public housing program files for eligibility, the following deficiencies were noted in 16 of 40 files: - City : 8 instances where the annual certification was not completed on an annual basis. - County : 7 instances where the annual certification was not completed on an annual basis. - County: 1 instance where the annual recertification was not completed in 2024. The most recent annual recertification had been conducted in 2022. Cause: The Agency failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Further, staff changes and tenants providing documentation in a delayed manner contributed to the issues observed. Effect: The Agency is not in compliance with federal regulations regarding the recertification of household circumstances within 12 months. Repeat Finding: Yes, (2023-005) Recommendation: We recommend that management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grants Program Assistance Listing Number: 14.231 Federal Award Identification Number and Year: CA005/CA007 2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: - Significant Deficiency in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: Special Tests and Provisions-Subrecipient Payments The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203). Condition: The Agency did not have adequate internal controls designed to ensure that subrecipient payments are paid in accordance with compliance requirements. Questioned Costs: N/A Context: In 2023, 10 out of 29 payments to subrecipients were not done within 30 days as required by the grant. A follow-up selection was made in 2024 which also was not paid on time. Cause: The Agency did not sufficiently monitor controls to ensure compliance with program requirements over payments to subrecipients. Effect: The Agency is not in compliance with rules covering payments to subrecipients and the required 30 days. Repeat Finding: Yes, (2023-007) Recommendation: We recommend that management ensure that internal controls are in place to ensure subrecipient payments are paid timely and within program requirements. Views of Responsible Officials: There is no disagreement with the audit finding.