Audit 407494

Program: COVID-19 Community Development Block Grant Cluster Entitlement/Special Purpose Grants Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: B23-MC-20-0004 and 2023, B24-MC-20-0004 and 2024, B-25-MC-20-0004 and 2025 Program: COVID-19 Housing Voucher Center Cluster Federal Financial Assistance Listing Number: 14.871, 14.879 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: KS004VO0127 and 2025, EHV KS004 and 2025, KS004DV0001 and 2025 Compliance Requirements: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, state that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing, we identified the following instances where the timesheet was not reviewed and approved by the employee’s supervisor: • One (1) timesheet charged to the Community Development Block Grant (CDBG) program • Two (2) timesheets charged to the Housing Voucher Center Cluster (HVC) Cause: The City's internal control procedures permitted certain timesheets to be processed without documented supervisory approval. Effect: Because the City's internal control procedures permitted an exception to documented supervisory approval for the timesheets tested, evidence of review and approval was not available. As a result, the operation of the review control could not be verified for those timesheets.Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of forty (40) timesheets were selected for testing for the CDBG program. A nonstatistical sampling or forty (40) timesheets were selected for testing for the HVC program. The condition above was identified during our procedures related to activities allowed or unallowed and allowable costs/cost principles. Repeat Finding from Prior Years: No Recommendation: We recommend that management strengthen controls over payroll processing by ensuring that all timesheets charged to federal programs are reviewed and approved by an independent supervisor prior to payroll processing. Management should also periodically monitor compliance to confirm that approval controls are operating as designed. View of Responsible Officials: See separately issued Corrective Action Plan.

Program: COVID-19 Community Development Block Grant Cluster Entitlement/Special Purpose Grants Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: B23-MC-20-0004 and 2023, B24-MC-20-0004 and 2024, B-25-MC-20-0004 and 2025 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, state that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Condition: During our testing of the City’s compliance with reporting requirements, we noted four (4) PR-29 reports, where there was no evidence of the Housing Finance Manager’s review and approval prior to the report being submitted. Cause: The City's control procedures did not require documentation to be retained evidencing management review and approval of PR29 reports prior to submission. Effect: Although management indicated that an informal review occurred prior to submission, the control did not require retention of documentation evidencing the review. Consequently, the City could not demonstrate that supervisory review was performed for the reports tested.Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of four (4) of eight (8) PR-29 reports were selected. The condition above was identified during our testwork of the City’s internal controls over reporting. Repeat Finding from Prior Years: No Recommendation: We recommend the City adhere to their policies and ensure the review and approval of reports are documented. View of Responsible Officials: See separately issued Corrective Action Plan.

Program: COVID-19 Housing Voucher Center Cluster Federal Financial Assistance Listing Number: 14.871, 14.879 Federal Grantor: U.S. Department of Housing and Urban Development Award No. and Year: KS004VO0127 and 2025, EHV KS004 and 2025, KS004DV0001 and 2025 Compliance Requirements: Special Tests and Provisions – Housing Quality Standards Enforcement Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: Under the Housing Voucher Center Cluster (HVC) program, public housing authorities are required to enforce Housing Quality Standards (HQS) and take timely action to ensure identified deficiencies are corrected. Pursuant to 24 CFR 982.404 and 982.405, PHAs must inspect units, notify owners of deficiencies, ensure repairs are completed within required timeframes, and take appropriate enforcement actions when deficiencies are not remedied. Pursuant to 24 CFR 982.404(d)(2), when a non-life-threatening HQS deficiency is identified, the PHA must abate the Housing Assistance Payment (HAP), including amounts that have been withheld, if the owner fails to make the repairs within the applicable cure period (within 24 hours of notification for life-threatening deficiencies and within 30 days of notification (or other reasonable period established by the PHA) for non-life-threatening deficiencies). Condition: For one (1) unit that failed an HQS inspection due to non-life-threatening deficiencies, the City did not verify that the deficiencies were corrected within the required 30-day cure period. In addition, the City did not initiate abatement of Housing Assistance Payments after the unit remained noncompliant beyond the required timeframe. Effect: Failure to timely abate Housing Assistance Payments for units that remain noncompliant with HQS increases the risk that federal funds are disbursed for units that do not meet minimum housing quality standards. This condition indicates noncompliance with program requirements and reduces the effectiveness of the City’s enforcement of HQS standards.Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sampling of forty (40) failed inspections were selected for testing. The condition above was identified during our procedures related to special tests and provisions. Repeat Finding from Prior Years: No Recommendation: We recommend the City strengthen oversight over HQS inspections performed by its third-party contractor by implementing procedures to track and enforce required correction timeframes, including timely follow-up, documentation of inspection results, and prompt initiation of HAP abatement when deficiencies are not corrected within the required cure period. View of Responsible Officials: See separately issued Corrective Action Plan.