Audit 407412

2025-001 Special Tests and Provisions - Reasonable Rent Federal Program U.S. Department of Housing and Urban Development AL #14.871 and #14,879 Grant Award No. ND031-Housing Choice Vouchers & ND031-Mainstream Vouchers Grant Award Year 2025 Questioned Costs None. Criteria The Authority is required to compare and calculate reasonable rent for tenants. Considering the location, quality, and utilities offered by the owner, rent should not exceed 110% of the next most comparable units. (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition In our sample of 40 tenant files tested, we noted that 1 file did not include a rent reasonableness calculation. Context We selected 40 tenants to sample out of 370 total for the year. Effect HAP payments could have been paid to a tenant where the rent was not considered reasonable. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend that the Authority implement and use a standardized checklist to ensure that all tenant files contain the required documentation. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement the auditor’s recommendations.

2025-002 Special Tests and Provisions – HQS Quality Control Federal Program U.S. Department of Housing and Urban Development AL #14.871 & 14.879 Grant Award No. ND031-Housing Choice Vouchers & ND031-Mainstream Vouchers Grant Award Year 2025 Questioned Costs None. Criteria The Authority must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards (HQS), and the PHA must conduct quality control reinspections (24 CFR sections 982.305 and 982.405). Condition The minimum required number of quality control re-inspections were not performed. Context With an average of 302 vouchers in 2025, the Authority was required to sample 10 units. It was noted during testing that the Authority only sampled one. Effect Inspections may have been performed incorrectly, and potential errors would go undetected. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend that the Authority implement procedures to ensure that the required number of quality control inspections are performed. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement the auditor’s recommendations.

2025-003 Eligibility Federal Program U.S. Department of Housing and Urban Development AL #14.871 & 14.879 Grant Award No. ND031-Housing Choice Vouchers & ND031-Mainstream Vouchers Grant Award Year 2025 Questioned Costs None. Criteria Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). Additionally, as a condition of admission or continued occupancy, the Authority must require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). Condition During our testing, we noted several instances where required documentation for tenant files was missing. We noted the following during our testing selection of 40 files: 1) five instances in which a signed lease agreement was not maintained in the tenant file; 2) two files did not contain a signed HAP agreement; and 3) one file did not contain income verification documentation. Context We selected 40 tenants to sample out of 370 total for the year. Effect Tenants may not be provided the proper housing assistance in accordance with their income and eligibility factors. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend that the Authority implement and use a standardized checklist to ensure that all tenant files contain the required documentation. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement the auditor’s recommendations.

2025-004 Special Tests and Provisions – HQS Enforcement Federal Program U.S. Department of Housing and Urban Development AL #14.871 & 14.879 Grant Award No. ND031-Housing Choice Vouchers & ND031-Mainstream Vouchers Grant Award Year 2025 Questioned Costs None. Criteria For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections 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 (24 CFR sections 982.158(d) and 982.404). Condition Through a series of samples, it was noted that a bi-annual inspection was not performed on one tested file. We also noted 1 separate instance in which life-threatening deficiencies did not contain documentation noting they were corrected within the 24-hour requirement period. Context We selected 40 tenants to sample out of 370 total for the year. Effect HAP payments could be paid to a tenant where they should not be due to insufficient clearing of HQS inspection deficiencies. Cause Lack of controls and oversight during the year. Repeat Finding Not a repeat finding. Recommendation We recommend the Authority review their procedures for performing and documenting HQS inspections and follow-up on fails to ensure Housing Quality Standards are met. Views of Responsible Officials The Authority recognizes the deficiency and plans to implement the auditor’s recommendations.