Audit 412825

III - Findings and Questioned Costs - Major Federal Award Programs Audit Finding 2025-001 - Special Tests - Material Weakness Name of Federal Agency: United States Department of Housing and Urban Development Federal Program Name: Public Housing Operating Fund Assistance Listing Number: FALN #14.850 Federal Award Identification Number and Year: CT019-00000124D; 2025 Name of Pass-through Entity (if applicable): Not Applicable Material Weakness in Internal Control; Material Noncompliance Criteria HUD regulations for Computation of Utilities Expense Level - UEL (24 CFR § 990.170), require the public housing authority to retain data pursuant to 24 CFR § 990.325. PHAs receive invoices for utilities. The consumption and cost data from those invoices are aggregated, in an Excel workbook or other platform, commonly referred to as a utility ledger. The aggregated data is transferred to Form 52722. Condition The results of our testing of Form 52722 reporting requirements for funding period 01/01/2025 through 12/31/2025 (utility consumption period 7/1/2023 through 6/30/2024) indicated the following errors: In one instance, there were variances between the utility invoice amount and the utility cost reported on Form 52722. In two instances, there were variances between the utility invoice consumption amount and the consumption amount reported on Form 52722. In six instances, the incorrect unit of measure was used on Form 52722. Questioned Costs Not determinable. Context We selected a sample of 25 utility invoices for review. Our sample was a statistically valid sample. Effect or Possible Effect There are variances between the utility invoices and Form 52722. Therefore, the report submission is inaccurate. Cause Greenwich Communities' internal controls were not adequate to ensure that the information reported in Form 52722 was complete and accurate. Identification as a Repeat Finding This finding is a repeat finding (see prior year finding number: 2024-001) Recommendation We recommend that Greenwich Communities improve its internal processes to ensure all updates made to the utility invoices are reflected in Form 52722 as well as ensuring information reported in Form 52722 is accurate for the time period being reported. Greenwich Communities' Response It is important to note that the issues highlighted in the 2025 audit findings occurred entirely prior to the implementation of our corrective action plan. Since these procedural updates were established, we have experienced zero HUD reporting discrepancies. Historically, this finding was mainly due to delays in the processing and payment of utility invoices. This was in part attributed to a staff shortage in accounts payable coupled with an increase in the number of properties under management, which significantly heightened the volume of utility invoices. To permanently address these issues, we hired a staff accountant in August 2024 whose dedicated responsibilities include the accounting for utility expenses. We have since implemented additional procedures to strengthen utility processing and ensure invoices are processed and paid timely. This includes maintaining a comprehensive monthly analysis of utility expenses to track invoices, ensuring everything is processed timely and/or accrued properly. We also perform a rigorous variance analysis of expenses, whereby significant variations are promptly investigated and resolved. Effective for the 2025/2026 utility cost reporting period and moving forward, we have operationalized a robust review process: utility cost reports are prepared by the staff accountant, reviewed by the Controller, and given final approval by the Chief Financial Officer.

Finding 2025-002 - Eligibility - Material Weakness Name of Federal Agency: United States Department of Housing and Urban Development Federal Program Name: Public Housing Operating Fund Assistance Listing Number: FALN #14.850 Federal Award Identification Number and Year: CT019-00000124D; 2025 Name of Pass-through Entity (if applicable): Not Applicable Material Weakness in Internal Control; Material Noncompliance Criteria HUD regulations require the collection and retention of certain information to document tenant eligibility including electronic income verification ("EIV"). EIV's must be submitted timely. Condition The results of our testing indicated that certain items were not performed timely: In twenty-nine instances, electronic income verification was not performed timely. Questioned Costs Not determinable. Context We selected a sample of 60 files for review. Our sample was a statistically valid sample. Effect or Possible Effect The tenant income verification was not performed timely. Cause The cause is unknown. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation We recommend that Greenwich Communities improve its internal processes to ensure tenant income verification is performed timely. Greenwich Communities' Response Management Response Greenwich Communities' Response Greenwich Communities accepts the audit finding that electronic income verification was not performed timely in twenty-nine instances, and we have already implemented corrective actions to resolve the issue. Corrective Actions Completed: Targeted Training was provided to the manager responsible for income verifications. Process Review sessions ensured that the manager fully understands the correct verification workflow and strict compliance deadlines. Updated Tracking mechanisms were put in place to flag pending verifications before they become overdue. Preventive Measures: Regular Monitoring by supervisors will catch any delayed verifications immediately. Monthly Checks will ensure staff continue to follow the correct timeline for electronic income verification.