Audit 395123

Criteria: A fundamental concept of a system of internal controls is the segregation of incompatible duties. Condition: Due to the limited size of the Authority's business staff and related resources available, the Authority does not have adequate segregation of duties so that no one individual handles a transaction from its inception to its completion. Questioned Costs: None. Effect: The control deficiency could result in a misstatement to the financial statements that would not be prevented or detected in a timely manner. Cause: Limited number of staff and hours available preclude the Authority from ideal segregation of duties of separating the assignment of different staff people to authorize transactions, record transactions, and maintain custody of assets. Repeat Finding: This finding was reported in the prior year as finding 2024-001. Recommendation: Although it may not be economically feasible for the Authority to attain an ideal segregation of duties environment, the Authority can periodically observe and evaluate its current structure to make improvements when considered necessary. Views of Responsible Officials and Planned Corrective Actions: The Authority is in agreement with the finding. See separately issued Corrective Action Plan.

Criteria: Generally, a system of internal control includes the ability to understand and prepare the Authority's financial statements in accordance with accounting principles generally accepted in the United States of America. Condition: Due to the limited size of the Authority's business staff and related resources available, material audit adjustments were required for the financial statements to be presented in accordance with accounting principles generally accepted in the United States of America. Questioned Costs: None. Effect: Audit adjustments were necessary to correct material misstatements noted during the audit for the financial statements to be in compliance with generally accepted accounting principles. Cause: Limited number of staff and hours available preclude the Authority from having proper resources to prepare all required adjusting journal entries necessary in preparing financial statements. Repeat Finding: This finding was reported in the prior year as finding 2024-002. Recommendation: The Authority should continue to review internal controls currently in place and improve internal controls over financial reporting so that financial statements are in compliance with generally accepted accounting principles. Views of Responsible Officials and Planned Corrective Actions: The Authority is in agreement with the finding. See separately issued Corrective Action Plan.

Criteria: The Authority is required to adhere to the Housing Quality Standards (HQS) relating to the Housing Voucher Cluster program. The Housing Quality Standards require that the Authority systematically inspects voucher properties to determine that established housing quality and safety standards are met, or if deficiencies are found, they are corrected in a timely manner. According to CFR 24 982.404, units under HAP contracts that fail to meet housing quality standards, the public housing authority (PHA) must require the owner to correct any life threatening HQS deficiencies within 24 hours of the inspection and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition: The Authority systematically inspects voucher properties for compliance with the Housing Quality Standards; however, five properties were found to have life threatening issues that the Authority did not complete the reinspection within the 24-hour period provided by the standards and three properties were found to have non-life threatening issues that the Authority did not complete the reinspection within the 30 calendar days provided by the standards. Only six of the eight properties were corrected before required voucher abatement. Effect: The Authority was not in compliance with the Housing Voucher Cluster Housing Quality Standards. Questioned Costs: $48,441 Context/Sampling: A sample of 10 of 99 housing quality standard violations were tested. 8 of the 10 sampled contained violations that were not corrected within the period provided by the standards. Cause: Limited number of staff trained for Housing Quality Standards and a lack of follow-up with landlords and/or tenants regarding violations resulted in the noncompliance. Repeat Finding: This finding was reported in the prior year as finding 2024-003. Recommendation: We recommend that the Authority develop and implement procedures for the Housing Quality Standards which provide for re-inspections within the period provided by the standards for housing quality violations. Views of Responsible Officials and Planned Corrective Actions: The Authority is in agreement with the finding. See separately issued Corrective Action Plan.