Audit 408690

Finding 2025-001 – Housing Choice Voucher Tenant Files – Eligibility – Internal Control over Tenant Files - Noncompliance & Significant Deficiency – Housing Choice Voucher Program – ALN 14.871 Condition & Cause: We reviewed 215 Housing Choice Voucher tenant-based and project-based assistance tenant files and noted 62 files (28.8% of the sample) with one or more of the following noncompliance exceptions: • Unsupported Actions – 3 files: Files lacked adequate supporting documentation for the applicable action taken. • Adjusted Annual Income Errors – 32 files (14.9%): 19 files contained missing or outdated income or deduction verifications; 15 files contained miscalculations of adjusted annual income. This rate increased from 11% in the prior year. • Late Annual Reexaminations – 20 files (9.3%): Annual reexaminations were completed more than three months past the due date. This rate increased from 4.8% in the prior year. • Missing EIV Documentation – 11 files (5.1%): Required Enterprise Income Verification (EIV) reports were not obtained at reexamination. This rate increased from 2.0% in the prior year. • Outdated or Unsupported Utility Allowance – 2 files: Actions were based on an outdated or unsupported Utility Allowance schedule. • HQS Inspection Overdue – 2 files: Units had not received a Housing Quality Standards (HQS) inspection within the prior 24 months as of fiscal year-end 2025. • Missing or Untimely Signatures – 2 files: Actions were either unsigned by an adult household member at the time of completion or contained signatures dated materially after the action date. Based on extrapolation, the potential misstatement of HAP expense due to the identified noncompliance is both immaterial to the audited financial statements and below the disclosure threshold. The noncompliance identified above is attributable primarily to leadership transitions within the HCV program. Both the Tenant-Based Voucher (TBV) and Project-Based Voucher (PBV) leadership positions experienced extended vacancies and multiple personnel changes over the past three years, a pattern not isolated to the current audit period. Criteria: Housing Choice Voucher program participants are subject to eligibility and file documentation requirements established by 24 CFR Part 982, 24 CFR § 5.609, HUD Handbook 4350.3, applicable HUD notices, and the Agency's HCV Administrative Plan. Effect: Failure to accurately document and calculate annual income and conduct timely reexaminations can result in improper HAP payments, jeopardizing the integrity of HCV program funding. Noncompliance with program requirements may also impose an undue financial burden on participants, contrary to the Agency's mission. During deposit testing, we identified two instances in which tenants were overcharged rent as a direct result of late reexaminations, with rental charges not adjusted to reflect the effective date of the rent decrease. Continued noncompliance risks HUD sanctions, including a reduction in vouchers or loss of program funding. Recommendation: The Agency should increase monitoring and continue to leverage its internal compliance team, established in Q1 2025, to implement standardized file review procedures, monitor reexamination due dates, and ensure EIV documentation and income verification requirements are met consistently across both TBV and PBV programs. Ongoing staff training efforts should be maintained to reinforce regulatory requirements as leadership stabilizes. Questioned Costs: None Repeat Finding: Yes Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations

Finding 2025-002 – Section 8 Project-Based Voucher Program – Eligibility; Special Tests and Provisions – Waitlist Selection & Management – Noncompliance and Significant Deficiency – Housing Choice Voucher Program - ALN 14.871 Condition & Cause: We reviewed the waitlists and selection documentation for a sample of newly leased tenants from the Section 8 Project-Based Voucher program. The selections reviewed were conducted in March, May, July, and October 2025. In total, we reviewed 175 applicants for proper preferences, selection, and recordkeeping. We identified two categories of noncompliance affecting multiple applicants. Category 1: Improper Targeted Elderly Selections – Potentially Bypassed Eligible Applicants We identified 12 applicants (6.9% of our sample) who were potentially eligible for assistance and were not selected. There are multiple factors that caused this. First, incorrect preference designations in Yardi resulted in applicants who were age-eligible to not be considered for selection. Second, when GHA raised the elderly property eligibility age from 55 to 62 on January 1, 2023, applicants already on the waitlist under the prior standard were intended to be grandfathered — meaning they would remain eligible despite not meeting the new age threshold. In practice, however, this group was not considered during any 2025 selections. Finally, outdated data was used to conduct these selections. Specifically, a May 2025 listing was used to conduct selections in July and October, meaning that new applications and preference updates were not taken into consideration. Category 2: Insufficient Audit Trail in Yardi We identified 21 applicants (12% of our sample) without sufficient documentation to support that the selections were conducted in accordance with the Agency’s Admin Plan. These were noted in selections conducted in March and May 2025. As of the audit fieldwork in March 2026, these selected applicants had no documentation available in Yardi to support GHA’s eligibility determinations. Supplemental documentation provided did not give adequate assurance that applicants were properly tracked through the full post-selection process. Criteria: The Code of Federal Regulations and the Agency’s Administrative Plan establish specific requirements governing the selection of applicants from the waiting list, the accuracy and consistent application of preferences, and the documentation of all selection decisions. Specifically, the Admin Plan states that “the first qualified applicant in sequence on the HCVP Project-Based Assistance Program waiting list will be made an offer of project-based assistance” and “substantive contacts between the Greensboro Housing Authority and the [applicant] will be documented in the YARDI system.” Effect: Failure to select applicants from the waiting list in accordance with the Admin Plan and to maintain contemporaneous records can result in housing the wrong family as vouchers become available, undermining the integrity of the selection process. This could result in a violation of the Fair Housing Act and other federal requirements, increasing the risk of program sanctions. Recommendation: We recommend that the Agency conduct a review of applicants potentially impacted by incorrect preference designations and those with grandfathered status to ensure they are appropriately considered in future selections. We also recommend that the Agency implement controls to ensure that selections are conducted based on current data. Furthermore, the Agency should reinforce staff training on Yardi documentation requirements. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.