Audit 375845

Finding 2025-002 – Low Rent Public Housing Tenant Files – Eligibility – Rent Calculations Noncompliance and Material Weakness Low Rent Public Housing – ALN 14.850 Condition & Cause: Our review of thirty (30) Low Rent Public Housing tenant files identified noncompliance in twelve (12) files within one or more categories. Of these, eight (8) files, or roughly 26%, were for the determination of adjusted annual income. Specifically, we noted the following: • Three (3) files were missing proper income verification • Three (3) files included income miscalculations • Two (2) files lacked required documentation to support deductions • Five (5) units did not have evidence of an annual inspection on file Based on extrapolation of these errors to the population, we identified likely questioned costs totaling $134,699, representing approximately 3.25% of total dwelling rental income. We also observed that the Public Housing department operated with significant staffing shortages for much of the fiscal year, which likely contributed to these deficiencies. Criteria: HUD regulations (24 CFR § 5 and § 960) and the Agency’s Admissions and Continued Occupancy Policy (ACOP) require accurate and properly supported rental charge determinations and annual unit inspections. Effect: The lack of proper income verification, calculation errors, and missing deduction support may result in incorrect rent charges and misreported income, increasing the risk of financial misstatement and noncompliance with HUD requirements. The absence of documented annual unit inspections could result in health and safety issues going unaddressed and may expose the Agency to liability. Recommendation: We recommend that the Authority enhance its quality control procedures to ensure compliance with HUD income determination regulations and annual unit inspection requirements. Regular internal reviews and staff training should be conducted to address these compliance issues effectively. Questioned Costs: $134,699 Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2025-003 – Section 8 Project-Based Cluster Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Project-Based Cluster – ALN 14.195 and 14.249 Condition & Cause: We reviewed twenty (20) tenant files from the Section 8 Project-Based Cluster. We noted nine (9) files with noncompliance. Specifically, two (2) files were missing proper income verification, and seven (7) files were missing the EIV report. We observed that the Public Housing department, which manages the Agency’s Project-Based vouchers, operated with significant staffing shortages for much of the fiscal year, which likely contributed to these deficiencies. Criteria: The Code of Federal Regulations and the Authority’s Administrative Plan require proper third-party income verification and use of the EIV system in its entirety. Effect: Failure to maintain complete and accurate tenant files, including income verification and EIV reports, increases the risk of ineligible tenant assistance, incorrect subsidy calculations, and misstatements of financial reporting. Recommendation: We recommend that the Authority enhance its quality control procedures to ensure compliance with HUD income verification regulations and EIV review requirements. Regular internal reviews and staff training should be conducted to address these compliance issues effectively. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.

Finding 2025-001 – Housing Choice Voucher Tenant Files – Eligibility – Rent Calculations Noncompliance & Significant Deficiency Section 8 Housing Choice Voucher Cluster – ALN 14.871 and 14.879 Condition: We reviewed sixty-five (65) tenant files from the Housing Choice Voucher Cluster programs. We noted thirteen (13) files with exceptions in one or more compliance categories. Of these, seven (7) files, or roughly 10%, were noncompliant for reasons related to adjusted annual income. Specifically, we noted: • Four (4) instances of miscalculated income • Two (2) instances of missing or improper income verification • Two (2) instances of missing or improper deduction verification • Six (6) instances in which the EIV report was not maintained with the tenant file We were able to numerically extrapolate these errors to the population and found the potential misstatement to be immaterial to program HAP expense. Notably, all income-related discrepancies were found in files selected from a HAP register dated earlier in the fiscal year, indicating improvements in compliance as the year progressed. Cause: During part of the year, the Agency experienced staffing challenges related to hiring, training, and retention. As a result, it partially relied on contracted services to process reexaminations. Additionally, internal quality control reviews conducted during the year revealed that EIV reports were not being properly stored. This issue was addressed with the Agency’s housing database vendor upon discovery. Criteria: HUD regulations (24 CFR § 5 and § 982) and the Agency’s Administrative Plan require accurate income and deduction verification, proper rent calculations, and use of the EIV system. Effect: Errors in income calculation, missing or inadequate verification documentation, and absent EIV reports can result in inaccurate HAP amounts, either overpaying or underpaying assistance. While the extrapolated financial impact of the errors identified was determined to be immaterial to overall program expenses, continued noncompliance could pose a risk to the integrity of the program and may result in questioned costs or future findings if not addressed. Recommendation: The Agency should continue to monitor areas and strengthen controls pertaining to income verification, calculation, and documentation retention to promote continued improvement and prevent recurrence of similar issues. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.