Audit 405725

Finding Reference: 2025-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Eligibility Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.516, the Authority must reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payments as necessary using the documentation from third party verification. As a condition of admission to or continued assistance, the Authority shall require the tenant and other family members to provide necessary information, documentation, and execute a HUD-approved release and consent form authorizing the Authority to verify income eligibility. For both family and income examinations and reanimations, the Authority must obtain and document in the tenant file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent. 24 CFR 982.516 also requires the Authority to establish procedures that are appropriate and necessary to assure that income data provided by application or participant families is complete and accurate. Condition From a total population of 17,852 tenants under the Housing Choice Voucher cluster for the fiscal year ended September 30, 2025, we selected a statistically valid sample of one monthly subsidy payment within the fiscal year ended September 30, 2025, for each of 60 selected tenants. For four of the tenants examined, the reexaminations were not completed within the required time frame. Cause of Condition The Authority has been working through a backlog of delinquent reexaminations due to challenges with past service providers not meeting contractual commitments to timely perform the reexaminations on behalf of the Authority. The Authority has since changed service providers and is in process of completing the delinquent reexaminations. Effect The Authority is not in compliance with HUD requirements regarding annual re-examination of family income and composition, which may result in inaccurate assistance provided to participants. Questioned Costs The Authority was able to provide documentation demonstrating that reexaminations were completed subsequent to the tested subsidy payments. Therefore, there were no questioned costs identified in connection with the tenants examined. Identification of Repeat Finding This is a repeat of finding 2024-002 reported for the year ended September 30, 2024 Recommendation The Authority should continue utilizing its enhanced tracking tools and updated procedures to monitor the completion of annual tenant reexaminations and supporting documentation. Management should continue working through the existing backlog of overdue reexaminations, reinforce staff accountability for timely completion and filing of required documents, and maintain ongoing supervisory review to ensure compliance with HUD requirements. Additionally, the Authority should periodically evaluate the effectiveness of its tracking processes and make further refinements, as necessary, to promote timely completion of reexaminations, reduce processing delays, and prevent future backlogs. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.

Finding Reference: 2025-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Assistance Listing Number: 14.871 and 14.879 Federal Grant Number: Not Applicable Category of Finding: Special Tests and Provisions (Housing Quality Standards Inspections) Classification of Finding: Significant Deficiency in Internal Control over Compliance Instance of Noncompliance Criteria Pursuant to 24 CFR 982.158 and 982.405, the Authority must inspect the units leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and must also conduct quality control re-inspections. The PHA must prepare and maintain a unit inspection report for at least three years. Condition From a total population of 17,852 tenants for the fiscal year ended September 30, 2025, we selected a statistically valid sample of one monthly subsidy payment for each of 60 selected tenants and identified seven tenants whose HQS inspections were not completed by the required due dates and prior to the subsidy payments. Cause of Condition The Authority’s inspection scheduling and documentation practices were not consistently applied in a manner that ensured all required HQS inspections were completed by their due dates and that related inspection records were maintained in accordance with HUD requirements. Effect The Authority is not in compliance with the HQS inspection requirements. The Authority may be paying Housing Assistance Payments (HAPs) to property owners whose units have inadequate housing quality. Questioned Costs The units were ultimately inspected and determined to be compliant with the Housing Quality Standards. Questioned costs were not identified. Identification of Repeat Finding This is a repeat of finding 2024-003 reported for the year ended September 30, 2024. Recommendation The Authority should implement more structured oversight of its HQS inspection workflow to promote timely completion of required inspections and consistent maintenance of inspection records. This may include adopting clearer scheduling protocols, improving monitoring of inspection due dates, and reinforcing expectations for documenting and retaining inspection results in accordance with HUD requirements. View of Responsible Officials and Planned Corrective Action See separately prepared Corrective Action Plan.