Audit 413338

Eligibility Housing Voucher Cluster Significant Deficiency in Internal Control Material Noncompliance (Repeated in part from prior year, Finding No. 2023-004) Condition: Out of an approximate population of 1,800 Housing Voucher Cluster tenants we tested 42 tenants and the following deficiencies were noted: • Two files did not agree with the amount of HAP reported in the HAP register, • Two files did not have inspection documentation during the period, • Two files were missing QC checklists, • One file was missing a signed 9886 form effective for the period, • One file was missing required identification for an adult member of a household, and • One file will missing all supporting documentation. Criteria: The Authority’s Administrative Plan and 24 CFR 982.516 requires internal controls to be in place to ensure proper procedures are being followed in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Context: The auditor randomly selected tenant files out of the population from each program as outlined, which we consider to be a statistically valid sample size. The auditor reviewed the tenant files and support to ensure that proper procedures are being followed and that the Authority is in compliance with HUD requirements regarding timely, complete, and accurate tenant files. Cause: The Authority experienced staffing and operational challenges and did not have the available staff to follow the established internal controls to ensure proper compliance with regards to timely recertifications and collection of required HUD documentation to verify eligibility and calculate accurate housing assistance payments. Effect: The Authority is not in compliance with HUD requirements regarding eligibility which could result in the incorrect amount of rental assistance provided. Questioned Costs: Unknown. Auditor Recommendations: The Authority should reevaluate their established procedures and controls in place to ensure full compliance in regards to eligibility and the timeliness of recertifications. The Authority needs to correct the deficiencies noted in the tested files and consider the impact to the rest of the population of tenant files that were not selected as part of the auditor’s sample.

Financial Reporting - Disclaimer of Opinion Housing Voucher Cluster Public and Indian Housing - AL No. 14.850 Public Housing Capital Fund - AL No. 14.872 Material Weakness in Internal Control Material Noncompliance Condition: During our audit of the Authority’s financial statements, numerous material balances lacked full support and it was noted that certain accounts had not been properly reconciled and correcting entries were not available. Given these issues, the auditor did not have enough time to complete the necessary audit procedures and as such have issued a disclaimer of opinion on the financial statements. Context: We obtained the financial information from the Authority’s general ledger system. As part of our audit process, the financial information was compared to the unaudited submission sent to the U.S. Department of Housing and Urban Development Real Estate Assessment Center (“REAC”). Due to the lack of support, adequate audit procedures were not able to be performed on significant areas. Criteria: In accordance with AU-C 265, when a deficiency or a combination of deficiencies in internal control is identified, which indicates that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis, a material weakness should be reported. Cause: The Authority was unable to maintain proper oversight of its financial closing processes and recording keeping during a period of staff transitions. As a result the Authority did not have access to accurate closing schedules and was not able to implement the internal controls and processes to ensure that the general ledger and the unaudited REAC submission was complete and accurate. Effect: The general ledger and the unaudited data submitted to REAC required numerous and material audit adjustments that delayed the audit, and therefore HUD could not provide proper timely financial oversight based on the unaudited REAC submission. In addition, we were not able to complete the required audit procedures which resulted in a disclaimer of opinion on the financial statements. Questioned Costs: Unknown Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over both internal and external reporting, and the year-end close process to ensure reporting remains accurate and timely, with any unexpected financial data being investigated and corrected before it is reported. The Authority should consider additional staff training on development activities.

Inability to Test Compliance Requirements Housing Voucher Cluster Public and Indian Housing - AL No. 14.850 Public Housing Capital Fund - AL No. 14.872 Material Weakness in Internal Control Material Noncompliance (Repeated in part from prior year, Finding 2023-005) Condition: The Authority did not provide adequate records or supporting documentation for the necessary audit procedures to be performed for the following compliance requirements: • Housing Voucher Cluster - Reporting, Special Tests and Provisions (Waiting List) • Public and Indian Housing - Allowability, Eligibility, Procurement, Special Tests and Provisions (Waiting List) • Public Housing Capital Fund – Allowability, Cash Management, Procurement Criteria: Uniform Guidance, per 2 CFR Section 200.302 and 200.303, requires recipients of federal awards funding to maintain records with sufficient documentation to support compliance. Context: The auditor was not able to review adequate support to perform audit procedures for compliance testing. Cause: The Authority experienced staffing and operational challenges during the prior year and did not have the available staff to follow the established internal controls to meet the timeframe given for audit testing. Effect: The auditor was unable to obtain sufficient appropriate evidence to form an opinion on compliance. Questioned Costs: Unknown. Auditor Recommendations: The Authority should implement controls to ensure documentation is maintained and made available.