Audit 382965

Assistance Listing Number/Federal Program/Granting Agency: ALN 14.871/14.879 Section 8 Housing Choice Voucher/Mainstream Vouchers Programs (Housing Voucher Cluster) Criteria: Section 8 Housing Choice Voucher Program requires the Authority to obtain and document in the file third-party verification of assets, income, expenses and other factors that affect the determination of adjusted income as a condition of admission or continued occupancy. Statement of Condition: During our test of compliance over the HCV program, which has a population of over 250 tenant files, we noted 1 exception out of 25 tenant files tested. A third-party of verification documented annual child support income $7,696 annually. However, only $3,207 was included in the income calculation on Form 50058. Questioned Costs: below $25,000. Cause: The omission was due to oversight by the Housing Authority as well as a lack of training and understanding related to properly calculating and reporting income. Effect or Possible Effect: The error resulted in tenant portion of rent and Housing Assistance Payments to be miscalculated. Perspective: One instance of noncompliance was identified within a sample of 25 HAP vouchers totaling $29,006 from a universe of over 250 applicable vouchers, which is a statically valid sample. This indicates a potentially systemic issue within the income verification process, not just an isolated error. Repeat Finding: Not a repeat finding. Recommendation: We recommend the Housing Authority provide targeted refresher training to staff and reviewers specifically on identifying and properly recording non-wage income sources (such as child support) to ensure these amounts are consistently included in the income calculation. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to submit annual financial reports, including RD Forms 3560-7 and 3560- 10 with 12 months of balance sheet and actual income and expenses, to RD no later than 90 days following the close of the project fiscal year. Statement of Condition: During our test of compliance over the RD program, management did not provide RD Forms 3560-7 and 3560-10 with 12 months of balance sheet and income and expenses for Canyon East and Menta Park at the time of our review. The reports were eventually submitted to RD on 12/18/25, which was more than 90 days after fiscal year-end and therefore not within the required time frame. Questioned Costs: None. Cause: The reporting delays were due to the transition of management companies during the year, which disrupted normal reporting processes. Effect or Possible Effect: The Housing Authority did not comply with the reporting requirement set forth in the RD HB-2-3560 Chapter 4, Section 5 Annual Financial Reporting Due Dates and Agency Review of Annual Financial Reports, which could affect reserve funding availability for project maintenance or repairs. Perspective: The noncompliance identified relates to the annual financial reporting for 2 RD-funded projects, and the population tested consisted of 100% of projects subject to the annual reporting requirement. As the required reports for both projects were submitted after the required deadline, the noncompliance affected the entire population for the period under audit. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Repeat finding. Recommendation: The Housing Authority should implement a formal tracking process to monitor the submission of all required RD reports and ensure that copies of RD Forms 3560-7 and 3560-10, along with supporting financial statements, are retained for each project. This process should include clear responsibilities and deadlines, particularly during management transitions, to ensure timely compliance with RD reporting requirements. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to make deposits into the Replacement Reserve account in accordance with the requirements set forth in the projects’ RD loan agreements Statement of Condition: During our test of compliance over the RD program, we noted that deposits for Canyon East and Menta Park were missing for the period March 2025 through June 2025, totaling $16,617. Questioned Costs: None. Cause: The deposit delays were due to the transition of management companies during the year, which disrupted normal deposit processes. Effect or Possible Effect: The Housing Authority did not fully comply with the RD loan agreement requirements for timely Replacement Reserve deposits, which could affect reserve funding availability for project maintenance or repairs. Perspective: The required Replacement Reserve deposits totaled $49,852 for the fiscal year, representing 12 months of required deposits in accordance with the RD loan agreements. Deposits were underfunded by $16,617, as no deposits were made from March 2025 through June 2025. As both RDfunded projects were affected during this four-month period, the noncompliance impacted 100% of the population for that portion of the year. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Not a Repeat finding. Recommendation: We recommend the Housing Authority implement a formal monitoring process to track Replacement Reserve deposits and ensure that all required deposits are made timely, even during management transitions. Views of Responsible Officials: Agree.

Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to make all payments due under the RD note and mortgage in accordance with the loan agreements. Statement of Condition: During our test of compliance over the RD program, we noted missing mortgage payments totaling $10,895 for Menta Park (April – June 2025) and $4,198 for Canyon East (March – April and June 2025). Questioned Costs: None. Cause: The payment delays were due to the transition of management companies during the year, which disrupted normal payment processes. Effect or Possible Effect: The Housing Authority did not fully comply with the RD loan agreement requirements for timely mortgage payments, which could result in noncompliance with RD loan terms and potential interest or penalty accrual. Perspective: The required mortgage payments totaled $60,375 for the fiscal year, representing 12 months of required payments in accordance with the RD loan agreements. Payments were short by $15,093 due to 3 months missing payments for Menta Park and Canyon East. As both RD-funded projects were affected during this 3-month period, the noncompliance impacted 100% of the population for that portion of the year. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Not a Repeat finding. Recommendation: We recommend the Housing Authority implement a formal monitoring process to track all RD mortgage payments and ensure that payments are made timely and properly documented, particularly during management transitions. Views of Responsible Officials: Agree.