Audit 370549

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Significant Deficiency Criteria or Specific Requirement – The Program requires the Authority to obtain and document in the family file third party verification of: (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516) for both family income examinations and reexaminations. Condition – We tested forty files for eligibility and noted one file with annual income errors. We also noted the leasing and property manager did not have documentation of performing the historical internal control practice of reviewing a sample of tenant files. Cause – Management oversight. Questioned Costs – Undeterminable Context – We tested compliance and internal controls on a sample of 40 tenant files out of the population of approximately 1,640 total tenants. Effect – The tenant could be receiving HAP that is either incorrect or possibly ineligible. Recommendation – We recommend that the Authority review the procedures for maintaining and reviewing tenant files to ensure all required documentation is available to support the tenant’s eligibility. Repeat Finding – Yes – see 2022-001. Views of Responsible Officials – Management will review their tenant file documentation procedures to ensure controls are in place to identify missing documentation within tenant files.

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Significant Deficiency Criteria or Specific Requirement – Financial Reports (OMB No. 2535-0107) – Financial Assessment Subsystem, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASS-PH system is one of HUD’s main monitoring and oversight systems for the HCVP. Condition – We noted that the un-audited REAC was not submitted by the required deadline of February 28, 2024. Cause – Time constraints on the Authority’s staff. Questioned Costs – Not applicable Context – We tested compliance and internal controls to see if the submission had been made. Effect – The Authority is not in compliance with HUD reporting requirements. Recommendation – We recommend that the Authority review the procedures and controls for submitting the un-audited REAC. Repeat Finding – Yes – see 2022-002. Views of Responsible Officials – The Authority will publish time schedules internally for reporting and make sure staff are aware of deadlines.

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Material Weakness Criteria or Specific Requirement – The Program requires the Authority to determine that the rent to owner is reasonable at the time of initial leasing and 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. Condition – We noted eight tenant files that did not have documentation of rent reasonableness at the time of a change. Cause – Management Oversight. Questioned Costs – Not applicable Context – We tested compliance on a sample of 40 tenant files out of the population of approximately 1,640 total tenants. Effect – The rent may not be reasonable. Recommendation – We recommend that the Authority review the procedures for maintaining and reviewing tenant files to ensure required documentation is available to support the rent to owner. Repeat Finding – Yes – see 2022-003. Views of Responsible Officials – The Authority will review its policies and procedures for ensuring rent reasonableness documentation is maintained within the files.

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Material Weakness Criteria or Specific Requirement – The Program requires the Authority to have written policies in its HCVP administrative plan for selecting applicants from the waiting list and PHA documentation must show the PHA follows these policies when selecting these applicants for admission from the waiting list. Except 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 (24 CFR sections 5.410, 982.5(d), and 982.201 through 982.207). Condition – The Authority had 42 pulls from the waiting list in the current year. We selected 5 pulls (10%) and tested to ensure those at the top of the waiting list on the pull dates were selected. The Authority was unable to provide us documentation supporting those individuals were at the top of the waiting list on the pull dates. Cause – Management Oversight. Questioned Costs – Not applicable Context – We tested compliance on a sample of 5 pull dates (10%) out of the population of 42 pull dates. Effect – Applicants may not be selected from the waiting list properly. Recommendation – We recommend that the Authority review the procedures for maintaining and reviewing the waiting list to ensure required documentation is available to support the applicants pulled on the pull dates. Repeat Finding – No. Views of Responsible Officials – The Authority will review its policies and procedures for ensuring proper documentation of waiting list pulls.

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Significant Deficiency Criteria or Specific Requirement – The Program requires the Authority to 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 section 982.158(d) and 982.405(b)). Condition – During our testing of forty tenant files, we noted one file did not have a biennial inspection. Cause – Management Oversight. Questioned Costs – Not applicable Context – We tested compliance on a sample of 40 tenant files out of the population of approximately 1,640 total tenants. Effect – Units may not be meeting HQS requirements. Recommendation – We recommend that the Authority review the procedures for performing inspections to make sure all units are being inspected at least biennially. Repeat Finding – No. Views of Responsible Officials – The Authority will review its policies and procedures for ensuring inspections happen timely.

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Material Weakness Criteria or Specific Requirement – The Program requires the Authority to submit the HUD form 52681-B. The PHA submits this form monthly to HUD electronically via the VMS. Congress has instructed HUD to use VMS data to determine renewal funding levels. HUD also used the VMA data for other funding, monitoring, and SEMAP-related decisions. HUD relies on the audit of the key line items below to determine the reasonableness of the data submitted for the purposes of calculating funding under the program. Condition – During out review of the Authority’s VMS Data Collection Report, they were unable to provide documentation that the monthly VMS reports were submitted within 30 days of month end. Thay also could not provide documentation on the difference of the amount the VMS showed and the amount the Authority requested for expenses. Cause – Turnover in staffing and lack of oversight. Questioned Costs – Not applicable Context – The Authority was unable to provide documentation that the monthly VMS reports were submitted within 30 days of month end. The Authority also could not provide documentation on why the VMS did not match their system for the amount of funding requested on one of the months tested. Effect – Inaccurate VMS reporting can result in improper federal funding. Recommendation – We recommend that the Authority review the procedures and controls for submitting the VMS reports for accurate and timely submissions. Repeat Finding – No Views of Responsible Officials – The Authority will review responsibilities pertaining to VMS reporting and ensure timely, accurate, and appropriate VMS reporting.

Federal Program – Housing Voucher Cluster 14.871 & 14.879 – Material Weakness Criteria or Specific Requirement – The Uniform Guidance requires all entities that expend in excess of $750,000 to file audited financials statements and Data Collection Form within 9 months of year-end. (2 CFR Section 200.512). Condition – The Authority’s December 31, 2023 audited financial statements were not filed with the Federal Audit Clearinghouse within nine months of year-end. Cause – Turnover in staffing and lack of oversight led to information not being ready for audit in a timely manner. Questioned Costs – Not applicable Context – The audited financial statements were note submitted timely. Effect –The Authority could have had federal funding delayed or reduced. Recommendation – We recommend that the Authority implement internal controls to ensure reporting is filed timely. Repeat Finding – No Views of Responsible Officials – The Authority recognizes the deficiency and plans to implement the auditor’s recommendation.