Audit 4551

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-005 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Waiting List New Tenants The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). Condition: During the testing of the Public and Indian Housing for the City and County files certain special provision compliance deficiencies were noted. City -2 instances out of 9 files reviewed where the initial signed application was missing. County -3 instances out of 5 files reviewed where the initial signed application was missing. -2 instances out of 5 files reviewed where the tenant file was missing a copy of the selection letter. Questioned costs: None Context: Out of the 14 total files tested, 5 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-005 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Waiting List New Tenants The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). Condition: During the testing of the Public and Indian Housing for the City and County files certain special provision compliance deficiencies were noted. City -2 instances out of 9 files reviewed where the initial signed application was missing. County -3 instances out of 5 files reviewed where the initial signed application was missing. -2 instances out of 5 files reviewed where the tenant file was missing a copy of the selection letter. Questioned costs: None Context: Out of the 14 total files tested, 5 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-006 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). b. The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). (a)The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, nearelderly, displaced, or a person with disabilities. Condition: During the testing of the Public and Indian Housing tenant files for the City and the County certain special provision compliance deficiencies were noted. City: -33 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -2 instances where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -33 instances where the tenant file was missing the lease/rent adjustment letter. -33 instances where the tenant file was missing the recertification package/application. -8 instances where the rent posted per register did not agree with the rent per 50058. County: -8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -1 instance where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -5 instances where the tenant file was missing the lease/rent adjustment letter. -5 instances where the tenant file was missing the recertification package/application. -3 instances where the rent posted per register did not agree with the rent per 50058. Questioned costs: None Context: Out of the 40 files tested for the City, 33 contained errors and out of the 40 files tested for the County, 11 contained errors, as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-006 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). b. The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). (a)The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, nearelderly, displaced, or a person with disabilities. Condition: During the testing of the Public and Indian Housing tenant files for the City and the County certain special provision compliance deficiencies were noted. City: -33 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -2 instances where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -33 instances where the tenant file was missing the lease/rent adjustment letter. -33 instances where the tenant file was missing the recertification package/application. -8 instances where the rent posted per register did not agree with the rent per 50058. County: -8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -1 instance where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -5 instances where the tenant file was missing the lease/rent adjustment letter. -5 instances where the tenant file was missing the recertification package/application. -3 instances where the rent posted per register did not agree with the rent per 50058. Questioned costs: None Context: Out of the 40 files tested for the City, 33 contained errors and out of the 40 files tested for the County, 11 contained errors, as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing & Urban Development (HUD) Federal Program Name: Community Development Block Grants/Entitlements Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0003/B-21-UC-06-0005/2021 Award Period: January 1, 2021, to December 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Agency did not submit the required Federal Funding Accountably and Transparency Act report for the first-tier subawards from funding received under the program. Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Questioned Costs: None Effect: Noncompliance with reporting requirements for the federal program. Context: Federal Funding Accountability and Transparency Act reporting was not submitted related to first-tier subrecipients with total awards passed through of $3,152,860. Cause: The program manager did not know that additional reporting was required. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Agency provide additional training to program managers regarding the documentation of program compliance requirements and the development of internal controls to ensure that all compliance requirements are met. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-002 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 982.516). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5 Subpart F (24 CFR section 5.601 et seq.) (24 CFR sections 982.201, 982.515, and 982.516). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516). Condition: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted. Of the tenant files provided, auditor noted the following items: - 2 instances where the housing authority failed to process annual examination within 12 months. Questioned costs: $30,898 Context: Out of 40 HCV tenant files tested, 2 tenant files contained errors as noted above. Cause: The housing authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority is not in compliance with federal regulations regarding the calculation of the rent and verification of the tenants income. Recommendation: We recommend management should designate one person to review a sample of the files that have been recertified each month. The purpose of the review is to determine if the tenant files were prepared in accordance with internal policies and verify the compliance deficiencies have been corrected. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Annual HQS Inspections The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During the testing of the Housing Choice Voucher program tenant files for the biennial HQS, certain deficiencies were noted. Of the files tested, on 5 cases the housing authority failed to perform biennial inspection within time requirements. Questioned costs: $52,063 Context: Out of the 40 files tested, 5 contains errors as noted above. Cause: The Authority failed to scheduled inspection in a timely manner to assure biennial inspection was performed within 24 months. Effect: The Authority is not in compliance with federal regulations regarding the HQS inspections. Recommendation: We recommend that the housing authority designate an individual to review HQS inspections to assure they are done in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-HQS Enforcement For units under HAP contract that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days or within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within the specified correction period, the PHA must abate HAP payments beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. The owner is not responsible for a breach of HQS as a result of the family’s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During the testing of the HCV tenant files, certain special provision compliance deficiencies were noted: -2 instances where the re-inspections were not completed within 30 calendar days of the first failed inspection. -8 instances where the housing authority failed to properly abate HAP payments after the second failed inspection. Questioned costs: $19,928 Context: Out of the 40 files tested, 8 contains errors as noted above. Cause: The Authority failed to follow their HQS Enforcement procedures. Effect: The Authority is not in compliance with federal regulations regarding minimum housing quality standards and was paying housing assistance for units that did not meet these standards. Recommendation: We recommend management should designate one person to oversee the inspection process to ensure that all inspections are being performed in a timely manner. Furthermore, management should ensure no HAP payments are issued for units that have not passed HQS housing inspections. Views of responsible officials: There is no disagreement with the audit finding.

2021-005 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Waiting List New Tenants The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). Condition: During the testing of the Public and Indian Housing for the City and County files certain special provision compliance deficiencies were noted. City -2 instances out of 9 files reviewed where the initial signed application was missing. County -3 instances out of 5 files reviewed where the initial signed application was missing. -2 instances out of 5 files reviewed where the tenant file was missing a copy of the selection letter. Questioned costs: None Context: Out of the 14 total files tested, 5 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-005 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Special Tests and Provisions-Waiting List New Tenants The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). Condition: During the testing of the Public and Indian Housing for the City and County files certain special provision compliance deficiencies were noted. City -2 instances out of 9 files reviewed where the initial signed application was missing. County -3 instances out of 5 files reviewed where the initial signed application was missing. -2 instances out of 5 files reviewed where the tenant file was missing a copy of the selection letter. Questioned costs: None Context: Out of the 14 total files tested, 5 contains errors as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-006 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). b. The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). (a)The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, nearelderly, displaced, or a person with disabilities. Condition: During the testing of the Public and Indian Housing tenant files for the City and the County certain special provision compliance deficiencies were noted. City: -33 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -2 instances where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -33 instances where the tenant file was missing the lease/rent adjustment letter. -33 instances where the tenant file was missing the recertification package/application. -8 instances where the rent posted per register did not agree with the rent per 50058. County: -8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -1 instance where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -5 instances where the tenant file was missing the lease/rent adjustment letter. -5 instances where the tenant file was missing the recertification package/application. -3 instances where the rent posted per register did not agree with the rent per 50058. Questioned costs: None Context: Out of the 40 files tested for the City, 33 contained errors and out of the 40 files tested for the County, 11 contained errors, as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

2021-006 Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: January 1, 2021 – December 31, 2021 Type of Finding:  Noncompliance and Material Weakness in Internal Control over Compliance Criteria or specific requirement: Eligibility Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of household signs (a) a certification that the information provided to the PHA is correct; (b) one or more release forms to allow the PHA to get information from third parties; (c) a federally prescribed general release form for employment information; and (d) a privacy notice. Under some circumstances, other members of the family may be required to sign these forms (24 CFR sections 5.212, 5.230, and 5.601 through 5.615). b. The PHA must do the following: (1) As a condition of admission or continued occupancy, require the tenant and other family members to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 960.259). (2) For both family income examinations and reexaminations, obtain and document in the family file third party verification of (a) reported family annual income, (b) the value of assets, (c) expenses related to deductions from annual income, and (d) other factors that affect the determination of adjusted income or income-based rent (24 CFR section 960.259). (3) Determine income eligibility and calculate the tenant’s rent payment using the documentation from third party verification in accordance with 24 CFR Part 5, Subpart F (24 CFR sections 5.601 et seq., and 24 CFR sections 960.253, 960.255, and 960.259). (4) Select tenants from the public housing waiting list (see III.N.2, “Special Tests and Provisions – Public Housing Waiting List”) (24 CFR sections 960.206 and 960.208). (5) Reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259). (a)The Rental Demonstration program prohibits PHAs from rescreening or requiring a tenant recertification due solely to a RAD conversion. However, this requirement does not eliminate the normally scheduled recertification (normally annually). Recertifications required to be performed as part of the normal tenant recertification process that occur after the RAD conversion, but before the end of the calendar year, will be conducted under the selected conversion program (PBV or PBRA) and not Public Housing. These recertifications are to be conducted to ensure that tenant payments are appropriate under the new program. Any testing that results in an audit finding should be a finding of the PBV or PBRA program and not of the public housing program. (b) Eligible beneficiaries are lower income families, which include citizens or eligible immigrants. “Families” include, but are not limited to, (1) a family with or without children; (2)an elderly family (head, spouse, or sole member 62 years or older); (3) near-elderly family (head, spouse, or sole member 50 years old but less than 62 years old); (4) a disabled family; (5) a displaced family; (6) the remaining member of a tenant family; or (7) a single person who is not elderly, nearelderly, displaced, or a person with disabilities. Condition: During the testing of the Public and Indian Housing tenant files for the City and the County certain special provision compliance deficiencies were noted. City: -33 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -2 instances where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -33 instances where the tenant file was missing the lease/rent adjustment letter. -33 instances where the tenant file was missing the recertification package/application. -8 instances where the rent posted per register did not agree with the rent per 50058. County: -8 instances where the income, assets, and/or expenses calculated on the 50058 was not supported with verifications. -1 instance where the tenant file was missing the HUD9886. -1 instance where the tenant file was missing the housing authority general release of information form. -5 instances where the tenant file was missing the lease/rent adjustment letter. -5 instances where the tenant file was missing the recertification package/application. -3 instances where the rent posted per register did not agree with the rent per 50058. Questioned costs: None Context: Out of the 40 files tested for the City, 33 contained errors and out of the 40 files tested for the County, 11 contained errors, as noted above. Cause: The Authority failed to provide required documentation to be in compliance with program requirements. Effect: The Authority is not in compliance with federal regulations regarding the maintenance of the Public and Indian Housing waiting lists. Recommendation: We recommend management to assign a person that verifies all the documents are in place before processing new move ins. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing & Urban Development (HUD) Federal Program Name: Community Development Block Grants/Entitlements Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-21-MC-06-0003/B-21-UC-06-0005/2021 Award Period: January 1, 2021, to December 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Agency did not submit the required Federal Funding Accountably and Transparency Act report for the first-tier subawards from funding received under the program. Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Questioned Costs: None Effect: Noncompliance with reporting requirements for the federal program. Context: Federal Funding Accountability and Transparency Act reporting was not submitted related to first-tier subrecipients with total awards passed through of $3,152,860. Cause: The program manager did not know that additional reporting was required. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Agency provide additional training to program managers regarding the documentation of program compliance requirements and the development of internal controls to ensure that all compliance requirements are met. Views of responsible officials: There is no disagreement with the audit finding.