Audit 409622

Finding: 2025-001 Program Name: Section 8 Project Based Cluster (14.195-CL) Federal Awarding Authority: Department of Housing and Urban Development Compliance Requirement: Special Tests - Housing Quality Standards Inspections Type of Finding: Material Weakness; Material Noncompliance Criteria: The Authority must perform housing quality inspections at the time of initial occupancy and at least annually to ensure the units are decent, safe and sanitary. Condition: 18-unit inspection reports out of a sample of 40 units contained deficiencies that were not repaired or were not repaired timely. Cause: The Authority did not have appropriate controls in place over housing quality inspections to ensure deficiencies are repaired timely. Effect: The Authority was not in compliance with the housing quality inspection compliance requirements for the year ended December 31, 2025. Auditor Recommendation: The Authority should implement a process to ensure inspection deficiencies are repaired timely and documentation of repairs is maintained. Questioned Costs: None. Management’s Response: We currently have a process to respond to all life-threatening and health and safety inspection deficiencies in a timely manner. To improve the process for all other inspection deficiencies, we are working on a way to use technology to automatically import inspection findings into our system instead of manually entering each work order. This will reduce the time it takes to create work orders, allowing repairs to be completed more quickly. The system will also provide documentation of completed repairs, helping ensure records are maintained.

Finding: 2025-002 Program Name: Section 8 Project Based Cluster (14.195-CL). Federal Awarding Authority: Department of Housing and Urban Development Compliance Requirement: Eligibility Type of Finding: Significant Deficiency; Nonmaterial Noncompliance Criteria: From a sample of 40 files, the Authority was unable to provide the following documents: - Four citizenship declaration forms - One social security card - Two Personal Declaration and Questionnaire forms - Two Form 9887 Notice and Consent for Release of Information. - Eight files did not contain documentation supporting the tenant’s current year income used in the calculation of rent Condition: The Authority was unable to provide information necessary to determine eligibility for all applicants selected for testing. Cause: The Authority does not have a process in place to ensure all documentation necessary to complete the tenant reexamination process is obtained. Effect: The Authority did not maintain all required documentation in the tenant files selected for testing. Auditor Recommendation: The Authority should implement a system to review files for appropriate supporting documentation after each reexamination. Questioned Costs: None. Management’s Response: We have updated our file checklists to better ensure that staff collect all required supporting documentation needed to determine eligibility during each reexamination. Staff received training on the new checklist format in late 2025 and have begun using the updated checklists. We are also reviewing all participant files to verify they are complete and compliant. In addition, we have an internal file review process that includes quality control reviews of a percentage of files at each site to help ensure required documentation is present and program requirements are being met. Staff will also attend annual file compliance training to reinforce documentation requirements and support continued compliance going forward.

Finding: 2025-003 Program Name: Section 8 Project Based Cluster (14.195-CL) Federal Awarding Authority: Department of Housing and Urban Development Compliance Requirement: Special Tests - Contract Rent Adjustments Type of Finding: Significant Deficiency; Nonmaterial Noncompliance Criteria: The Authority must apply or ensure annual adjustments to contract rents are applied. Condition: Contract rent adjustments were not applied to the calculation of rent in 4 instances out of a sample of 40 calculations. Each tenant’s income used to calculate rent in the Form 50059 was less than the income per the documentation in the file, resulting in underpayment of rent by the tenant. Cause: The Authority did not have appropriate controls in place over contract rent adjustments to ensure the adjustments are applied to the calculation of rent. Effect: The Authority was not in compliance with the contract rent adjustments compliance requirements for the year ended December 31, 2025. Auditor Recommendation: The Authority should implement a process to verify contract rent adjustments are appropriately applied and supported by the file documentation. Questioned Costs: None. Management’s Response: Due to staffing challenges, some contract rent adjustments were implemented later than they should have been. We have since implemented a process to ensure contract rent adjustments are reviewed and applied timely. This process includes internal review procedures, and staff will receive annual training to reinforce contract rent requirements and help ensure adjustments are processed accurately and on time going forward.

Finding: 2025-004 Program Name: Public Housing Operating Fund (14.850) Federal Awarding Authority: Department of Housing and Urban Development Compliance Requirement: Eligibility Type of Finding: Significant Deficiency; Nonmaterial Noncompliance Criteria: For both family income examinations and reexaminations, the Authority must obtain and document in the file, third-party verification of reported family annual income Condition: The Authority was unable to provide documentation to show income had been verified during reexamination for 3 tenants out of a sample of 40 tenants. Cause: The Authority did not have appropriate controls in place to ensure and document that tenant income was verified for reexaminations. Effect: The Authority was not in compliance with eligibility compliance requirements for the year ended December 31, 2025. Auditor Recommendation: The Authority should implement a process to ensure third party documentation is obtained and maintained in the tenant file to support income reexamination. Questioned Costs: None. Management’s Response: Staff will attend annual file compliance training and upcoming rent calculation training to reinforce documentation requirements and ensure accurate income determinations going forward. We have also updated our file checklists, staff are reviewing all tenant files and we have an internal file review process, as noted in Finding 2025-002, to help ensure staff obtain and maintain all required third-party documentation for income reexaminations.