Eligibility Housing Voucher Cluster Material Weakness in Internal Control Material Noncompliance (Repeated in part from prior year, Finding No. 2022-003 and 2022-004) Condition: Out of an approximate population of 5,800 Housing Voucher Cluster tenants we tested 41 tenants and the following deficiencies were noted: • 10 files were missing 214 forms, • 9 files had incorrect income or missing income support, • 9 files were missing identification for adults in the household, • 8 files were missing birth certificates or other support for minors receiving income credits, • 6 units did not have the required inspections performed, • 3 files had late recertifications, • 3 files were missing valid 9886 forms, • 1 file was missing support of rent reasonableness that was required to be performed during the year for that unit, • 1 file was missing required asset support, and • 1 file contained an incorrect payment standard. 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. 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. 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.
Special Tests and Provisions - SEMAP Housing Voucher Cluster Material Weakness in Internal Control Material Noncompliance (Repeated in part from prior year, Finding No. 2022-003 and 2022-004) Condition: The Authority was under Troubled Status with HUD for its Housing Choice Voucher program during the 2023 fiscal year. There were multiple findings from HUD with a Corrective Action Plan implemented covering areas typically monitored through SEMAP self-assessment process. Criteria: The Authority is required to maintain oversight and internal controls of its federal programs. Context: The auditor received the HUD findings report and follow up Corrective Action Plan monitoring during the year. The Authority’s action items were ongoing throughout the duration of the audit. Cause: The Authority continued to experience reporting and operational challenges which require HUD oversight. In addition, it was noted that the Authority was not able to implement effective controls over their Housing Choice Voucher program during this year. Effect: The Authority is unable to perform their annual SEMAP reporting. Questioned Costs: Unknown. Auditor Recommendations: The Authority should evaluate and update its internal control policies and procedures related to HCV compliance requirements. The Authority should continue to work on its Corrective Action Plan with HUD to move out of Troubled Status. Management Response: See Corrective Action Plan.
2023-004 Special Tests and Provisions - Waiting List Housing Voucher Cluster Material Weakness in Internal Control Material Noncompliance (Repeated in part from prior year, Finding No. 2022-003 and 2022-004) 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. In addition, 8 of the 40 new admissions tested lacked support for the auditor to complete testing in this area. 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. 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. 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 not in full compliance with HUD requirements regarding waiting list and tenant placement which could result in tenants being issued a voucher incorrectly. 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.
Eligibility Public and Indian Housing - ALN 14.850 Material Weakness in Internal Control Material Noncompliance Condition: Out of an approximate population of 2,150 tenants from the Public and Indian Housing program, we tested 43 tenants and the following deficiencies were noted: • 16 files were missing a flat rent option form, • 14 files were missing 214 forms, • 10 units did not have the required inspection performed, • 9 files had incorrect income or missing income support, • 8 files incorrectly contained prior year information in the current year recertification, • 6 files were missing valid 9886 forms, • 2 files were missing identification for adults in the household, and • 1 file was missing birth certificate or other documentation for minors receiving income credits. Criteria: The Authority’s ACOP and 24 CFR 960.259 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. Context: The auditor haphazardly selected tenant files out of the population from the 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. 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 and retention of required HUD documentation to verify eligibility and calculate accurate tenant rental 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.
Special Tests and Provisions - Waiting List Public and Indian Housing Program - AL No. 14.850 Material Weakness in Internal Control Material Noncompliance 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 admitted into the Public Housing Program. 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 applicants were admitted in accordance with HUD waiting list and tenant selection requirements. Criteria: In accordance with 24 CFR 960.206 the Authority should follow the policies and procedures documented in its Public Housing Administrative Plan for applicant eligibility, purging the waiting list, and maintaining the proper order of the waiting list. Context: The Auditor recognized an issue with maintaining an accurate and up to date waiting list. The waiting list report could not be located and staff were unable to pull a waitlist report from the system to show historical data. 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 not in compliance with HUD requirements regarding waiting list and tenant placement which could result in tenants being housed incorrectly. 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 admission into the program. Management should update and formalize waiting list procedures in accordance with HUD regulations and the Authority’s ACOP, implement supervisory review controls to verify completeness of waiting list documentation prior to tenant admission, 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.
2023-007 Allowability - Interprograms Housing Voucher Cluster Material Weakness in Internal Control Material Noncompliance (Repeated in part from prior year, Finding No. 2022-001) Condition: Currently the Authority maintains a material interprogram receivable in Housing Choice Voucher program (“HCV”), which is due from the Central Office Cost Center (“COCC”). As of December 31, 2023, the interprogram receivable for HCV is $2,500,000. Criteria: Per HUD regulations, 2 CFR part 200, and the line definition guide issued by HUD for the Financial Data Schedule, funds in HCV can only be transferred to other related Housing Assistance Payment based programs or to the COCC for a fee for service or other pre-approved HUD exceptions. The Authority is cautioned that funds are normally not fungible between different federal programs regardless of the nature of the transfer or receivable. Inappropriate use of funds, even a temporary loan, are considered ineligible costs resulting in non-compliance. HCV, under current laws, should not loan the COCC any funds. Context: During the audit review of reconciling cash, it was observed that COCC had been transferred these funds in prior years. Cause: The Authority lacked internal controls to prevent the misuse of federal funds to cover operating losses in the COCC. Effect: The Authority is not in compliance with HUD requirements regarding eligible use of federal funds. Questioned Costs: $2,500,000 Auditor Recommendations: The Authority should follow the Recovery Plan, once established, that will be implemented with HUD to pay back the interprogram receivable. The Authority should continue to budget and monitor COCC and other Authority expenses to eliminate the need for borrowing funds from restricted federal programs, and to have the ability to reimburse HCV for the borrowed funds. Management Response: See Corrective Action Plan.