Condition: Out of an approximate population of 375 Housing Voucher Cluster tenants we selected 40 tenants for testing and the following deficiencies were noted: • 5 files were not able to be provided for testing, • 15 files were missing 214 forms, • 13 files had incorrect income or missing income support, • 13 files contained incorrect or unsupported utility allowance, • 12 files were missing support of rent reasonableness that was required to be performed during the year for that unit, • 11 files were not able to support the amount paid to landlords on the HAP register, • 9 files were missing valid 9886 forms, • 8 files contained an incorrect payment standard, • 7 files did not have the required inspections performed, • 6 files were missing identification for adults in the household, • 4 files were not able to provide a prior year 50058 form to determine if the current year recertification occurred within the 12 month period, and • 1 file contained an incomplete 50058 form to determine the amount of HAP calculated. Context: The auditor haphazardly selected tenant files out of the population from each program as outlined, which we consider to be a statistically valid sample size. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Authority is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Criteria: The Authority’s Administrative Plan and 24 CFR 982.516 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The Authority experienced staffing and operational challenges and did not have the available staff to follow the established internal controls to ensure proper compliance with regards to timely recertifications and collection of required HUD documentation to verify eligibility and calculate accurate housing assistance payments. Effect: The Authority is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: Unknown. Auditor Recommendations: The Authority should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample. Management Response: See Corrective Action Plan.
Condition: During our audit, we noted that the Authority was unable to provide complete and adequate waiting list documentation to support the selection of tenants who were issued housing vouchers. Specifically, required records demonstrating waiting list position, selection order, and eligibility determinations were not available for review. As a result, we were unable to verify that vouchers were issued in accordance with HUD waiting list and tenant selection requirements. Context: The HCV program requires housing authorities to maintain a waiting list and to issue vouchers in a manner that is consistent with HUD regulations and the Authority’s Administrative Plan. The waiting list reports could not be located and staff were unable to pull waitlist reports from the system to show historical data. Criteria: In accordance with 24 CFR 982.204 the Authority should follow the policies and procedures documented in its Administrative Plan for applicant eligibility, purging the waiting list, and maintaining the proper order of the waiting list. Cause: The Authority experienced staffing turnover and did not have the available staff to fully implement the established internal controls to ensure proper maintenance and compliance of the waiting list. Effect: The Authority is unable to demonstrate that housing vouchers were issued in accordance with HUD waiting list and tenant selection requirements. Questioned Costs: None. Auditor Recommendations: We recommend that management perform a reconciliation of the waiting list and reconstruct missing documentation where possible to support applicant selection and voucher issuance. Management should update and formalize waiting list procedures in accordance with HUD regulations and the Authority’s Administrative Plan, implement supervisory review controls to verify completeness of waiting list documentation prior to voucher issuance, and ensure records are retained in accordance with HUD and federal record-retention requirements. In addition, management should provide training to staff responsible for waiting list administration to promote consistent compliance with HUD requirements. Management Response: See Corrective Action Plan.
Condition: The Authority’s self-assessed score for SEMAP was that of a High Performer. The Authority was not able to provide support for sampling calculations, testing that was performed for scoring, and PIC reports for the monitoring of certain indicators. As a result we are unable to verify the accuracy and completeness of the reported information. Context: SEMAP is used by HUD to evaluate the performance of housing authorities administering the HCV program. Housing authorities are required to maintain documentation supporting the data used in their SEMAP self-assessments. As part of our audit procedures over the Housing Voucher Cluster, we requested documentation supporting the SEMAP indicators reported by the Authority. Management was unable to provide sufficient documentation to support the self-assessed score. Criteria: Per 24 CFR 985, the Authority is required to assess certain performance indicators to enable HUD to measure the Authority’s performance in key areas. In addition, the Authority is required to establish and maintain records sufficient to support compliance with HUD program requirements, as well as establishing internal controls to ensure compliance with applicable regulations. Cause: The Authority experienced staffing turnover and the staff who performed the SEMAP monitoring during 2024 was no longer with the Authority at the time of the audit. The Authority did not have effective procedures in place to ensure that documentation supporting SEMAP indicators and self-assessed scoring was consistently retained, reviewed, and readily available for monitoring and audit purposes. Effect: The Authority’s SEMAP reporting appears to be more favorable compared to results seen during the audit testing, resulting in a SEMAP score that was higher than warranted. Questioned Costs: Unknown. Auditor Recommendations: The Authority should strengthen internal controls over SEMAP reporting by ensuring that complete and accurate documentation is maintained to support all SEMAP indicators and self-assessed scores. Management should implement procedures to review and retain SEMAP supporting documentation prior to certification, ensure records are retained in accordance with HUD and federal record-retention requirements, and provide training to staff responsible for SEMAP reporting to promote ongoing compliance. Management Response: See Corrective Action Plan.
Condition: For five of the seven contracts tested, the Authority was unable to provide adequate documentation to demonstrate that the contracts were properly procured. Missing documentation included Notice of Solicitation, contract proposals, Certification of Bidders, and documentation of evaluation or a bid listing with amounts. As a result, we were unable to determine whether the contracts were awarded in accordance with HUD procurement requirements. Context: The auditor haphazardly selected 7 contract files out of the population of 17 contracts procured during the year end September 30, 2024, which we consider to be a statistically valid sample. As part of our audit procedures, we reviewed procurement files to assess areas of compliance with HUD requirements and the effectiveness of internal controls over procurement activities. Criteria: The Authority’s procurement policy, HUD rules and regulations, and 2 CFR 200.318 require that certain procedures be performed in the procurement of vendors to ensure that fair and open competition results in services of the best possible value to the Authority, and that sufficient documentation be maintained to support the procurement method selected for the contract award process. Cause: The Authority experienced staffing and operational changes during and subsequent to the year ended September 30, 2024. Due to staffing changes and ineffective controls over the procurement process, the Authority was unable to ensure procurement requirements were consistently followed and that proper documentation was retained. Effect: As a result of the lack of adequate procurement documentation, the Authority is unable to demonstrate that contracts were awarded in compliance with the Authority’s and HUD’s procurement requirements. Questioned Costs: $343,477. Auditor’s Recommendations: The Authority should strengthen their internal controls over procurement by implementing standardized procurement procedures, including documentation checklists and supervisory review processes to ensure compliance with procurement requirements. The Authority should also provide training to staff involved in the process to ensure they are aware of the requirements and processes. Management Response: See Corrective Action Plan.
Condition: During our audit of payroll expenditures, the Authority was unable to provide adequate supporting documentation and as a result we were unable to verify that employees were paid at the properly approved rates for the periods tested and that internal controls were operating effectively. Context: The auditor haphazardly selected 13 employees from the employee listing for the year ended September 30, 2024, in order to test 2 different pay periods during the fiscal year, which we consider to be a statistically valid sample size. The auditor requested the personnel and human resources documentation to ensure that proper procedures are being followed and that the Authority is in compliance with HUD requirements regarding complete and accurate payroll files. Management was unable to provide sufficient documentation to support the pay rates being used in processing for the selected employees. Criteria: The Authority is required to maintain records that adequately support the compliance and allowability of expenditures charged to HUD-funded programs. In addition, HUD financial management and internal control requirements require management to establish and maintain internal controls that ensure payroll costs are properly authorized, documented, and supported. Adequate personnel files should include documentation supporting approved compensation, including initial salary approvals and subsequent changes. Cause: The Authority changed providers for its payroll processing after the fiscal year and the former provider was not able to provide adequate audit support for timecards. In addition, the Authority experienced a change in Human Resources personnel after the fiscal year and staff were not able to locate support for all wages paid during the year ended September 30, 2024. Effect: Due to the lack of documentation, processes and internal controls, the Authority is unable to properly monitor their payroll process to ensure accurate wages were disbursed to employees. Questioned Costs: Unknown. Auditor’s Recommendations: The Authority should implement internal controls over payroll and human resources to ensure complete and accurate personnel files are maintained on an ongoing basis for all employees. The Authority should review all current employee payroll files to ensure their files are up to date and include documentation supporting their approved pay rates and all subsequent compensation changes. Management Response: See Corrective Action Plan.