2022-001 FEDERAL COMPLIANCE ? VMS REPORTING Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development (?HUD?) Compliance Requirement: Reporting Criteria: All public housing agencies (?PHA?) are required to submit form HUD-52681-B, Voucher for Payment of Annual Contributions and Operating Statement, through the Voucher Management System (?VMS?) monthly. This information included on this form is utilized by HUD to determine funding levels. Condition: During our review of the reports submitted for FY22, we noted that the reports excluded HAP expenses for project-based vouchers for January and February of 2022 totaling over $100,000. Effect and Questioned Costs: Inaccurate reporting in VMS could result in a negative effect on funding levels. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure that accurate information is reported in VMS. Management?s Response: Prior to March 2022, reporting of Project Based Vouchers HAP payment amounts were not an option to input. This is a new field in the system. Administrator will ensure field will be reported for each month following February 2022.
2022-002 FEDERAL COMPLIANCE ? PIC ERRORS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Reporting Criteria: The PHA is required to submit HUD-50058, Family Report, through HUD?s PIH Information Center (?PIC?) each time it completes an admission, annual reexamination, interim reexamination, portability move-in, termination of participation, portability move-out, or other change of unit for a family. When the information is uploaded, an error report is generated detailing any noted issues with the family information. The City is then required to correct the information to eliminate the errors. Condition: During our audit, we noted that the PHA had over 50 submissions with errors and several dating back to the first few months of the fiscal year. Therefore, it appears that errors are not being resolved timely. Effect and Questioned Costs: Potentially incorrect information has been reported to HUD. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure that submitted HUD-50058 forms with errors be resolved timely. Management?s Response: Administrator will timely upload any required data into PIC system moving forward. Staff will continue to correct any previously discovered errors while resolving any errors that may occur.
2022-003 FEDERAL COMPLIANCE ? TENANT DOCUMENTATION Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Eligibility Criteria: 24 CFR ? 982.158 states "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. Condition: During our testing of tenant files, we noted two instances in which the PHA was not able to provide the family application, income verification documentation, and executed lease and HAP contract. Additionally, we noted two instances in which the documentation for interim recertifications due to a loss of income was not included in the tenant files. Effect and Questioned Costs: Noncompliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure that documentation is maintained in accordance with HUD requirements. Management?s Response: Our agency has implemented a scanning system which prints bar codes on each document that automatically goes to the correct tenant file. After documents have been signed they are scanned in. This will help alleviate misplaced documents/files. Staff has also been instructed to always put any type of correspondence with tenants in the electronic tenant file.
2022-004 FEDERAL COMPLIANCE ? QUALITY CONTROL INSPECTIONS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Criteria: 24 CFR ? 982 includes requirements and guidelines for PHA?s to perform Housing Quality Standards (?HQS?) inspections for all housing units and quality control re-inspections for a sample of units every year. The sample size of units selected for quality control re-inspections are to be calculated in accordance 24 CFR ? 982.2(b). Condition: We noted that the PHA should have performed 13 quality control re-inspections, but only completed 12. However, 1 of those re-inspections was performed by the same individual performing the original inspection on the same day of the original inspection. Additionally, all of the re-inspections were completed for units at the Harbor Hill complex and, therefore, do not represent a cross section of neighborhoods. Effect and Questioned Costs: Noncompliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the PHA comply with quality control re-inspection requirements by calculating the appropriate sample size with the sample representing a cross section of neighborhoods and that the re-inspections be performed by someone other than the individual or completed the original inspection. Management?s Response: Quality Control inspections are currently being scheduled as per 24 CFR 982.2(b). Inspections will be performed on both Section 8 properties and Project Based properties. All QC inspections will be completed by Property Maintenance Manager.
2022-005 FEDERAL COMPLIANCE ? WAITING LIST PREFERENCES Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Criteria: According to 24 CFR 982.54(d), the PHA?s administrative plan must include procedures for the ?Selection and admission of applicants from the PHA waiting list, including any PHA admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the PHA waiting list.? Condition: While reviewing applications for acceptance into the program, we noted several preference codes assigned to applicants that did not agree to information contained on the original application. Effect and Questioned Costs: Inadequate documentation of preference codes assigned to applicants. This could result in individuals improperly being moved to the top of the waiting list and allowed to enter the program before other qualified applicants. Repeat Finding: No Recommendation: We recommend that the PHA implement procedures to document any changes to the original preference codes assigned to applicants. Management?s Response: Administrator will review with staff agency Administrative Plan in accordance to CFR 982.2(b) in regards to policies and procedures for application documentation of preferences.
2022-006 FEDERAL COMPLIANCE - DISBURSEMENTS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Allowable Costs Criteria: The City?s internal controls require that all disbursements be approved by the finance department prior to payment and that bank reconciliations be performed on all accounts. Condition: During our audit, we noted several check runs for the Section 8 program that did not include the finance department?s approval for payment. Additionally, we noted four checks that cleared for amounts other than the amount included on the check register, including two checks whose payee did not agree to the register, a check that was issued twice, and other checks that did not appear on the register. These errors caused increased difficulty in reconciling the bank statements in a timely manner. Additionally, we noted one instance where the direct deposit information for one landlord was entered incorrectly, which resulted in a payment of approximately $2,000 being sent to the wrong bank account. Cause: According to the PHA director, these differences were caused by the check registers being printed by program instead of check number. Therefore, the payment amount for several tenants for a certain check were listed in a separate section. Other errors were due to misfeeds in the check printer. Based on discussions with City management, the direct deposit error was a result of taking the change over the phone and not obtaining documentation of the correct checking account number. Effect and Questioned Costs: Reduced effectiveness of internal controls with the possibility of incorrect payments being processed. Repeat Finding: No Recommendation: We recommend that the PHA implement procedures to ensure that checks written agree to the check register prior to mailing and the finance department approve all Section 8 check runs. These procedures should include printing the check register by check number and comparing the printed checks to the register prior to mailing. If any differences are noted due to misfeeds in the check printer, the register should be updated to reflect correct information. Furthermore, an updated check register should be provided to the finance department with a memorandum documenting the changes. The City may consider investing in printing equipment that allows check numbers to be printed on the checks instead of utilizing preprinted checks. Additionally, we recommend that all direct deposit changes be appropriately documented (i.e. cancelled check, deposit ticket, completed direct deposit form, etc.) from the landlord and be reviewed prior to processing the first payment. Management?s Response: Our agency is now printing check registers by check number which will alleviate the appearance of incorrect check amounts. We will be comparing checks to register prior to sending to finance for approval. Our staff will continue to confirm account numbers by using the direct deposit forms and canceled checks when available. We have started contacting finance prior to processing any Hold Harmless requests to ensure the original check hasn't cleared the bank before requesting a duplicate check.
2022-007 FEDERAL COMPLIANCE - OVERPAYMENTS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Allowable Costs Criteria: 2 CFR Part 200, Subpart E requires direct costs charged to grant programs be specifically identified with a particular cost objective. Condition: We noted overpayments to tenants and landlords totaling approximately $4,000 during FY22 with the errors carrying over to payments made during FY23. Cause: Through discussions with PHA management, it appears that these errors were due to incorrect effective dates being entered on form HUD-50058 during the recertification process. Currently, only new admissions are being subject to a supervisory review, while one is not being performed on interim and annual recertifications. Additionally, a Reconciliation Report is generated as part of the monthly check generation process that shows all changes that have been made to tenant information during the month. This report is not currently being reviewed. Effect and Questioned Costs: Incorrect amounts were paid to landlords and tenants. Repeat Finding: No Recommendation: We recommend that these overpayments be recouped from the landlords and tenants. Additionally, to prevent errors in the future, we recommend a supervisory review be performed on all interim and annual recertifications. Additionally, the ?Reconciliation Report? that is generated as part of the monthly check generation process should be reviewed to ensure all changes for the month are correct. Management?s Response: Each staff member has received training and has knowledge that effective dates for annual re-exams are to be for the 1st of the month Administrator is currently auditing all new admissions and random annual and interim reexaminations. Any errors found in this process are being corrected by caseworkers with Administrators help. Reconciliation report will be reviewed since audit. Funds have been recouped.
2022-008 FEDERAL COMPLIANCE ? RENT INCREASE NOTICE Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Criteria: The City?s Administrative Plan requires that tenants be given a 30-day notice before the effective date of a rent increase that is based on the results of an annual recertification. Condition: We noted one instance after year-end in which a tenant was only given a 4-day notice before the effective date of a rent increase. Effect and Questioned Costs: Noncompliance with the Administrative Plan for the program. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure tenants are given a 30-day notice prior to any rent increases that are result from an annual recertification. Management?s Response: Each caseworker has been issued an admin plan and refer to it often Staff has been made aware of increase in rent must be issued a 30 day notice If the tenant rent decreases, rent is to take effect immediately. Administrator is also auditing files to help alleviate any errors.
2022-001 FEDERAL COMPLIANCE ? VMS REPORTING Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development (?HUD?) Compliance Requirement: Reporting Criteria: All public housing agencies (?PHA?) are required to submit form HUD-52681-B, Voucher for Payment of Annual Contributions and Operating Statement, through the Voucher Management System (?VMS?) monthly. This information included on this form is utilized by HUD to determine funding levels. Condition: During our review of the reports submitted for FY22, we noted that the reports excluded HAP expenses for project-based vouchers for January and February of 2022 totaling over $100,000. Effect and Questioned Costs: Inaccurate reporting in VMS could result in a negative effect on funding levels. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure that accurate information is reported in VMS. Management?s Response: Prior to March 2022, reporting of Project Based Vouchers HAP payment amounts were not an option to input. This is a new field in the system. Administrator will ensure field will be reported for each month following February 2022.
2022-002 FEDERAL COMPLIANCE ? PIC ERRORS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Reporting Criteria: The PHA is required to submit HUD-50058, Family Report, through HUD?s PIH Information Center (?PIC?) each time it completes an admission, annual reexamination, interim reexamination, portability move-in, termination of participation, portability move-out, or other change of unit for a family. When the information is uploaded, an error report is generated detailing any noted issues with the family information. The City is then required to correct the information to eliminate the errors. Condition: During our audit, we noted that the PHA had over 50 submissions with errors and several dating back to the first few months of the fiscal year. Therefore, it appears that errors are not being resolved timely. Effect and Questioned Costs: Potentially incorrect information has been reported to HUD. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure that submitted HUD-50058 forms with errors be resolved timely. Management?s Response: Administrator will timely upload any required data into PIC system moving forward. Staff will continue to correct any previously discovered errors while resolving any errors that may occur.
2022-003 FEDERAL COMPLIANCE ? TENANT DOCUMENTATION Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Eligibility Criteria: 24 CFR ? 982.158 states "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. Condition: During our testing of tenant files, we noted two instances in which the PHA was not able to provide the family application, income verification documentation, and executed lease and HAP contract. Additionally, we noted two instances in which the documentation for interim recertifications due to a loss of income was not included in the tenant files. Effect and Questioned Costs: Noncompliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure that documentation is maintained in accordance with HUD requirements. Management?s Response: Our agency has implemented a scanning system which prints bar codes on each document that automatically goes to the correct tenant file. After documents have been signed they are scanned in. This will help alleviate misplaced documents/files. Staff has also been instructed to always put any type of correspondence with tenants in the electronic tenant file.
2022-004 FEDERAL COMPLIANCE ? QUALITY CONTROL INSPECTIONS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Criteria: 24 CFR ? 982 includes requirements and guidelines for PHA?s to perform Housing Quality Standards (?HQS?) inspections for all housing units and quality control re-inspections for a sample of units every year. The sample size of units selected for quality control re-inspections are to be calculated in accordance 24 CFR ? 982.2(b). Condition: We noted that the PHA should have performed 13 quality control re-inspections, but only completed 12. However, 1 of those re-inspections was performed by the same individual performing the original inspection on the same day of the original inspection. Additionally, all of the re-inspections were completed for units at the Harbor Hill complex and, therefore, do not represent a cross section of neighborhoods. Effect and Questioned Costs: Noncompliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that the PHA comply with quality control re-inspection requirements by calculating the appropriate sample size with the sample representing a cross section of neighborhoods and that the re-inspections be performed by someone other than the individual or completed the original inspection. Management?s Response: Quality Control inspections are currently being scheduled as per 24 CFR 982.2(b). Inspections will be performed on both Section 8 properties and Project Based properties. All QC inspections will be completed by Property Maintenance Manager.
2022-005 FEDERAL COMPLIANCE ? WAITING LIST PREFERENCES Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Criteria: According to 24 CFR 982.54(d), the PHA?s administrative plan must include procedures for the ?Selection and admission of applicants from the PHA waiting list, including any PHA admission preferences, procedures for removing applicant names from the waiting list, and procedures for closing and reopening the PHA waiting list.? Condition: While reviewing applications for acceptance into the program, we noted several preference codes assigned to applicants that did not agree to information contained on the original application. Effect and Questioned Costs: Inadequate documentation of preference codes assigned to applicants. This could result in individuals improperly being moved to the top of the waiting list and allowed to enter the program before other qualified applicants. Repeat Finding: No Recommendation: We recommend that the PHA implement procedures to document any changes to the original preference codes assigned to applicants. Management?s Response: Administrator will review with staff agency Administrative Plan in accordance to CFR 982.2(b) in regards to policies and procedures for application documentation of preferences.
2022-006 FEDERAL COMPLIANCE - DISBURSEMENTS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Allowable Costs Criteria: The City?s internal controls require that all disbursements be approved by the finance department prior to payment and that bank reconciliations be performed on all accounts. Condition: During our audit, we noted several check runs for the Section 8 program that did not include the finance department?s approval for payment. Additionally, we noted four checks that cleared for amounts other than the amount included on the check register, including two checks whose payee did not agree to the register, a check that was issued twice, and other checks that did not appear on the register. These errors caused increased difficulty in reconciling the bank statements in a timely manner. Additionally, we noted one instance where the direct deposit information for one landlord was entered incorrectly, which resulted in a payment of approximately $2,000 being sent to the wrong bank account. Cause: According to the PHA director, these differences were caused by the check registers being printed by program instead of check number. Therefore, the payment amount for several tenants for a certain check were listed in a separate section. Other errors were due to misfeeds in the check printer. Based on discussions with City management, the direct deposit error was a result of taking the change over the phone and not obtaining documentation of the correct checking account number. Effect and Questioned Costs: Reduced effectiveness of internal controls with the possibility of incorrect payments being processed. Repeat Finding: No Recommendation: We recommend that the PHA implement procedures to ensure that checks written agree to the check register prior to mailing and the finance department approve all Section 8 check runs. These procedures should include printing the check register by check number and comparing the printed checks to the register prior to mailing. If any differences are noted due to misfeeds in the check printer, the register should be updated to reflect correct information. Furthermore, an updated check register should be provided to the finance department with a memorandum documenting the changes. The City may consider investing in printing equipment that allows check numbers to be printed on the checks instead of utilizing preprinted checks. Additionally, we recommend that all direct deposit changes be appropriately documented (i.e. cancelled check, deposit ticket, completed direct deposit form, etc.) from the landlord and be reviewed prior to processing the first payment. Management?s Response: Our agency is now printing check registers by check number which will alleviate the appearance of incorrect check amounts. We will be comparing checks to register prior to sending to finance for approval. Our staff will continue to confirm account numbers by using the direct deposit forms and canceled checks when available. We have started contacting finance prior to processing any Hold Harmless requests to ensure the original check hasn't cleared the bank before requesting a duplicate check.
2022-007 FEDERAL COMPLIANCE - OVERPAYMENTS Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Allowable Costs Criteria: 2 CFR Part 200, Subpart E requires direct costs charged to grant programs be specifically identified with a particular cost objective. Condition: We noted overpayments to tenants and landlords totaling approximately $4,000 during FY22 with the errors carrying over to payments made during FY23. Cause: Through discussions with PHA management, it appears that these errors were due to incorrect effective dates being entered on form HUD-50058 during the recertification process. Currently, only new admissions are being subject to a supervisory review, while one is not being performed on interim and annual recertifications. Additionally, a Reconciliation Report is generated as part of the monthly check generation process that shows all changes that have been made to tenant information during the month. This report is not currently being reviewed. Effect and Questioned Costs: Incorrect amounts were paid to landlords and tenants. Repeat Finding: No Recommendation: We recommend that these overpayments be recouped from the landlords and tenants. Additionally, to prevent errors in the future, we recommend a supervisory review be performed on all interim and annual recertifications. Additionally, the ?Reconciliation Report? that is generated as part of the monthly check generation process should be reviewed to ensure all changes for the month are correct. Management?s Response: Each staff member has received training and has knowledge that effective dates for annual re-exams are to be for the 1st of the month Administrator is currently auditing all new admissions and random annual and interim reexaminations. Any errors found in this process are being corrected by caseworkers with Administrators help. Reconciliation report will be reviewed since audit. Funds have been recouped.
2022-008 FEDERAL COMPLIANCE ? RENT INCREASE NOTICE Federal Program Name: Housing Choice Voucher Program Catalog of Federal Domestic Assistance Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions Criteria: The City?s Administrative Plan requires that tenants be given a 30-day notice before the effective date of a rent increase that is based on the results of an annual recertification. Condition: We noted one instance after year-end in which a tenant was only given a 4-day notice before the effective date of a rent increase. Effect and Questioned Costs: Noncompliance with the Administrative Plan for the program. Repeat Finding: No Recommendation: We recommend that procedures be implemented to ensure tenants are given a 30-day notice prior to any rent increases that are result from an annual recertification. Management?s Response: Each caseworker has been issued an admin plan and refer to it often Staff has been made aware of increase in rent must be issued a 30 day notice If the tenant rent decreases, rent is to take effect immediately. Administrator is also auditing files to help alleviate any errors.