Audit 392191

Finding 2025-001 – Moving to Work Demonstration Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance & Significant Deficiency – Moving to Work Demonstration - ALN 14.881 Condition & Cause: We reviewed a sample of sixty-five (65) tenant files, which included both Public Housing and Housing Choice Voucher participants. Of these, nine (9) files were found to be noncompliant, representing approximately 13% of the sample. Some files had multiple compliance issues. It should be noted that all errors were isolated to the Public Housing program. Specifically, we identified: • Seven (7) files where the annual reexamination was completed or made effective at least two months past the due date. • Three (3) files lack proper verification of income or deductions. • Two (2) files lacked the required Enterprise Income Verification (EIV) documentation. • One (1) file contained a miscalculation of annual income. • One (1) file lacked identification and citizenship documents. The cause of this noncompliance, as discussed with management, is attributed to staff vacancies and challenges in hiring and retaining qualified personnel as well as an ongoing software conversion. Criteria: The Code of Federal Regulations, the Housing Authority’s Administrative Plan, Admissions & Continued Occupancy Policy, and MTW Plan, and specific HUD guidelines in documenting and maintaining Public Housing and Housing Choice Voucher tenant files. Effect: Deficiencies in tenant files can result in lost rental income due to late re-examinations, along with potential overpayments or underpayments by tenants stemming from inaccurate or unsupported rent determinations. Ongoing non-compliance may also draw scrutiny from regulatory bodies, increasing the risk of financial penalties or loss of funding for the MTW programs. Recommendation: We recommend that the Agency strengthen their quality control review and oversight procedures to ensure timely and accurate completion of all required tenant file documentation and reexaminations. Furthermore, the Agency should take measures to address staffing shortages. 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.

Finding 2025-002 – Procurement – Noncompliance with Formal Competitive Requirements – Noncompliance & Significant Deficiency – Moving to Work Demonstration - ALN 14.881 Condition: We reviewed a sample of procurements across various price ranges, including contracts associated with the largest purchases of the fiscal year, to determine compliance with the Housing Authority’s Procurement Policy and applicable Federal Regulations. We found that large purchases of playground equipment and installation for several properties were improperly split into smaller purchases by individual property, and no formal contract was executed. The Authority obtained a single set of quotes, citing that these applied to all properties; however, the aggregate project cost exceeded the small purchase ceiling. Based on 2 CFR §200.320(b)(2), this project met the conditions that would have required a formal competitive process such as Request for Proposals (RFP). In addition, we identified instances where contemporaneous documentation was not maintained, no written justification was provided for selecting a vendor other than the lowest bidder, and fewer than the required number of quotes were obtained for purchases exceeding the micro-purchase threshold. Cause: The identified noncompliance may have been driven by a misunderstanding of requirements outlined in Federal Regulations and local policy along with unclear staff responsibilities regarding various procurement tasks. Criteria: The Code of Federal Regulations and the Housing Authority’s Procurement Policy. Effect: The practices described above may lead to higher costs, reduced transparency, and limited competition. Noncompliance in procurement undermines the integrity of the procurement process and may result in the inefficient use of federal funds, violating HUD’s procurement standards. Recommendation: The Housing Authority should review and amend operating practices to ensure alignment with Federal Regulations and its Procurement Policy, including implementing controls to properly identify and procure large purchases and prevent the improper splitting of contracts in the future. Management should strengthen oversight and accountability by clearly defining and documenting staff roles and responsibilities. Comprehensive training should be provided to all personnel involved in procurement. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? No Views of responsible officials: The PHA agrees with the results of the audit and recommendations.