Audit 405133

Eligibility Housing Voucher Cluster Other matter required to be reported in accordance with 2 CFR 200.516(a) Condition: Out of an approximate population of approximately 600 tenants, 40 tenant files were tested and the following deficiencies were noted: • Four files did not have an inspection performed during the required period, • Two files did not have an up to date 9886 form on file, • One file did not have ID for an adult tenant in the household, and • One file had the incorrect income calculation, which did not impact the HAP received. Criteria: The Agency’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 40 tenants 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 Agency is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The Agency experienced staffing and operational challenges, which is impacting the housing industry as a whole and did not have the available staff to follow the established internal controls to ensure proper compliance with regards to recertifications and collection of required HUD documentation to verify eligibility and calculate accurate housing assistance payments. Effect: The Agency 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 Agency should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility. The Agency 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.

Eligibility Moving to Work Demonstration Program AL No. 14.881 Other matter required to be reported in accordance with 2 CFR 200.516(a) Repeated from 2024 audit (see prior year finding 2024-002) Condition: Out of an approximate population of approximately 4,800 tenants, 40 tenant files were tested and the following deficiencies were noted: • Two files did not have 214 documentation available for a member of the household, • One file had the incorrect income calculation, which impacted the HAP received, • One file had the incorrect income calculation, which did not impact the HAP received, • One file received the incorrect HAP for which no subsequent correction was made, and • One file did not have a required rent reasonableness performed during the year. Criteria: The Agency’s Moving to Work (“MTW”) Annual Plan, 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 40 tenants 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 Agency is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The Agency experienced staffing and operational challenges, which is impacting the housing industry as a whole and did not have the available staff to follow the established internal controls to ensure proper compliance with regards to recertifications and collection of required HUD documentation to verify eligibility and calculate accurate housing assistance payments. Effect: The Agency is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: $17,280. Auditor Recommendations: The Agency should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility. The Agency 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.

Cash Management Moving to Work Demonstration Program AL No. 14.881 Other matter required to be reported in accordance with 2 CFR 200.516(a) Repeated from 2024 audit (see prior year finding 2024-003) Condition: Out of the 66 grant drawdowns during the year, 19 drawdowns were tested and it was noted that one of the drawdowns was made in advance of the supporting invoices being paid to the vendors and subsequently the invoices were not paid within three business days, as required. Context: The auditor haphazardly selected 19 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Agency is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Agency to be properly spent within three business days of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Agency experienced staff turnover in the finance department as well as difficulty replacing personnel that were knowledgeable with HUD and grant reporting requirements. Effect: The Agency did not disburse the capital funds in a timely manner for one of the draws made during the year. Questioned Costs: $19,232 Auditor’s Recommendations: The Agency should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan.