Finding 2022-001 ? Assistance #14.871 ? Section 8 Housing Choice Vouchers ? Reporting (Material Weakness): Condition: A secondary review or approval of monthly and annual reporting submitted through HUD?s voucher management system was not being performed. One of the annual reports (SEMAP) had calculation errors. Criteria: Someone other than the preparer of the reports should be reviewing the submitted information. Questioned Costs: N/A Context: 3 of the 12 monthly financial reports and 62 annual performance reports were selected for review and did not contain evidence of a review or approval, and the SEMAP report was not reviewed and had calculation errors. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Housing Authority did not have a policy that required a secondary review or approval of the reports prior to submission to HUD. Effect: Information could be incorrectly reported or not timely reported to HUD. Recommendations: We recommend that the Housing Authority update policies and procedures to ensure that monthly and annual reports are being reviewed by someone other than the preparer, and also that copies of the submissions, along with supporting documentation, are being maintained to support the information being submitted to HUD. Views of Responsible Officials (Unaudited): Management acknowledges that secondary review of monthly and annual reports is a worthwhile internal control, and that there was a calculation error in one section of the annual SEMAP report. The Olathe Housing Authority will add secondary review of all portions of annual reporting to the Quality Control portion of the HCV procedures before the end of 2Q 2022. Secondary review of monthly reports was already adopted into the Quality Control potion of the HCV procedures in 3Q 2022. Management acknowledges that one of the monthly reports for 4Q 2022 is missing review documentation and is investigating the cause.
Finding 2022-002 ? Assistance #14.871 ? Section 8 Housing Choice Vouchers ? Eligibility (Material Weakness): Condition: A secondary review or approval of eligibility documentation was not being performed. Criteria: Someone other than the initial preparer of the eligibility calculations should be reviewing the information to ensure that all appropriate documentation has been received and input correctly. Questioned Costs: N/A Context: Although the Housing Authority implemented a new policy in October 2022 to ensure quality control reviews were performed for all eligibility decisions going forward, none of the 60 files selected for testing contained evidence of review by someone other than the preparer. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Housing Authority did not have a policy that required a secondary review or approval of eligibility documentation. Effect: Eligibility and associated housing assistance payment amounts could be calculated incorrectly. Recommendations: We recommend that the Housing Authority follow the new quality control policies and procedures implemented in the 4th quarter of 2022 to ensure that eligibility calculations are being reviewed by someone other than the preparer, and also that all required documentation is being maintained in tenant files. Views of Responsible Officials (Unaudited): Management agrees that this finding has already been addressed as noted in the recommendation. This is the same exact finding as 2021-006 in the prior year?s audit, which included a recommendation to add secondary review, which the Olathe Housing Authority implemented in 4Q 2022. While the new recommended control was implemented for all 4Q eligibility determinations, management understands that the files chosen for review were instead HCV files of voucher holders who began receiving rental assistance in 2022. Any applicant found eligible in 4Q 2022 did not begin receiving assistance until after receiving a voucher, signing a lease, and moving in, which did not occur until 1Q 2023. It is unfortunate that the auditors are required to once again choose files of HCV participants who had eligibility determined prior to implementing the recommended procedure change. Management understands that most of the HCV participant files that the auditors chose to review were from the exact same time period used during the prior year?s audit which made this finding a foregone conclusion. Management agrees that the control recommended in 2022 was not implemented until 2022, and so it remains just as true today as it was last year that files from many years ago continue to lack the control implemented in 2022. Management recommends that if files from prior to 2022 will continue to be reviewed for this control, and that if this finding is going to be repeatedly included, that auditor staff always review the prior year?s audit and always include an acknowledgement that the new secondary review control was implemented in 4Q 2022.
Finding 2022-003 ? Assistance #14.871 ? Section 8 Housing Choice Vouchers ? Special Tests: Selection from the Waiting List (Material Weakness): Condition: A secondary review of waiting list decisions was not being performed. In addition, it was noted that the wait list is only maintained for 3 years so evidence of wait list position for tenants that have been in the program for longer than 3 years could not be provided. Criteria: Tenant selection must include requirements for applications and waiting lists, a description of the policies for selection of applicant from the waiting list, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant. Questioned Costs: N/A Context: Although the Housing Authority implemented a new policy in October 2022 to ensure quality control reviews were performed for all waitlist decisions going forward, 46 of the 60 files selected for testing were for tenants that entered the program more than 3 years ago and therefore wait list support could not be provided. In addition, none of the tenant files contained evidence of review of the waitlist decision. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Housing Authority did not have a policy that required a secondary review or approval of wait list documentation. Effect: Improper wait list decisions could be made. Recommendations: We recommend that the Housing Authority follow the new quality control policies and procedures implemented in the 4th quarter of 2022 to ensure that wait list documentation is being reviewed and approved, and also that a copy of the waitlist documentation be kept in each tenant file so that there is a historical record of the wait list process once the actual wait list is no longer being maintained. Views of Responsible Officials (Unaudited): Management agrees that this finding has already been addressed as noted in the recommendation. This is the same exact finding as 2021-007 in the prior year?s audit, which included a recommendation to add secondary review, which the Olathe Housing Authority implemented in 4Q 2022. While the new recommended control was implemented for all 4Q waiting list determinations, management understands that the files pulled for review were instead HCV files of voucher holders who began receiving rental assistance in 2022. Any eligible applicant pulled from the Waiting List in 4Q 2022 did not begin receiving assistance until after receiving a voucher, signing a lease, and moving in, which did not occur until 1Q 2023. It is unfortunate that the auditors are required to once again choose files of HCV participants who were pulled from the Waiting List prior to implementing the recommended procedure change. Management understands that most of the HCV participant files that the auditors chose to review were from the exact same time period used during the prior year?s audit which made this finding a foregone conclusion. Management agrees that the control recommended in 2022 was not implemented until 2022, and so it remains just as true today as it was last year that files from many years ago continue to lack the control implemented in 2022. Management recommends that if files from prior to 2022 will continue to be reviewed for this control, and that if this finding is going to be repeatedly included, that auditor staff always review the prior year?s audit and always include an acknowledgement that the new secondary review control was implemented in 4Q 2022.
Finding 2022-004 ? Assistance #21.027 ? Coronavirus State and Local Fiscal Recovery Funds ? Suspension and Debarment (Significant Deficiency): Condition: The contracts used by the City did not include required language or items related to suspension and debarment. Criteria: The City is required to perform a verification check, by checking SAM.gov, collecting a certification, or adding a clause to the covered transaction for each vendor. Questioned Costs: N/A Context: For 2 contracts tested, the City used a cooperative procurement contract but there was no evidence the City performed a verification check, collected a certification, or added a clause to the covered transaction for each vendor. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The City believed this step had already been completed by the government entity that was a party to the cooperative procurement contract. Effect: The City may not detect vendors who are suspended or debarred from receiving federal funds. Recommendations: Revise policies to ensure the City performs a verification check, collects a certification, or adds a clause to the covered transaction for each vendor receiving federal funds. Views of Responsible Officials (Unaudited): Management acknowledges that there was a lapse in procurement internal controls and duties related to the verification of vendors receiving Coronavirus State and Local Fiscal Recovery Funds due to staff turnover and new positions within the Procurement Division. Management is in the process of reviewing its internal controls, processes, and procedures related to procurement. Updated procedures will include the verification of vendors through SAM.gov, collecting a certification, or adding a clause to the covered transaction for each vendor receiving federal funds.
Finding 2022-005 ? Assistance #21.027 ? Coronavirus State and Local Fiscal Recovery Funds ? Procurement (Significant Deficiency): Condition: The contracts used by the city did not include required language related to procurement. Criteria: If a contract was entered into, the provisions of Appendix II of 2 CFR 200 were included as applicable provisions with the contract. Questioned Costs: N/A Context: For 2 contracts tested, the City used a cooperative procurement contract but there was no evidence the City included the required language related to procurement requirements. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The City believed this step had already been completed by the government entity that was a party to the cooperative procurement contract. Effect: Vendors may not receive adequate communication of requirements for receiving federal funds. Recommendations: Revise policies to ensure the City includes the required procurement language in the contract for each vendor receiving federal funds. Views of Responsible Officials (Unaudited): Management acknowledges that there was a lapse in procurement internal controls and duties that resulted in contracts that received Coronavirus State and Local Fiscal Recovery Funds not including the provisions of Appendix II of 2 CFR 200. Management is in the process of updating its internal controls, processes, and procedures related to procurement and will update contract policies to include the provisions of Appendix II of 2 CFR 200 in all future contracts for vendors receiving federal funds.
Finding 2022-001 ? Assistance #14.871 ? Section 8 Housing Choice Vouchers ? Reporting (Material Weakness): Condition: A secondary review or approval of monthly and annual reporting submitted through HUD?s voucher management system was not being performed. One of the annual reports (SEMAP) had calculation errors. Criteria: Someone other than the preparer of the reports should be reviewing the submitted information. Questioned Costs: N/A Context: 3 of the 12 monthly financial reports and 62 annual performance reports were selected for review and did not contain evidence of a review or approval, and the SEMAP report was not reviewed and had calculation errors. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Housing Authority did not have a policy that required a secondary review or approval of the reports prior to submission to HUD. Effect: Information could be incorrectly reported or not timely reported to HUD. Recommendations: We recommend that the Housing Authority update policies and procedures to ensure that monthly and annual reports are being reviewed by someone other than the preparer, and also that copies of the submissions, along with supporting documentation, are being maintained to support the information being submitted to HUD. Views of Responsible Officials (Unaudited): Management acknowledges that secondary review of monthly and annual reports is a worthwhile internal control, and that there was a calculation error in one section of the annual SEMAP report. The Olathe Housing Authority will add secondary review of all portions of annual reporting to the Quality Control portion of the HCV procedures before the end of 2Q 2022. Secondary review of monthly reports was already adopted into the Quality Control potion of the HCV procedures in 3Q 2022. Management acknowledges that one of the monthly reports for 4Q 2022 is missing review documentation and is investigating the cause.
Finding 2022-002 ? Assistance #14.871 ? Section 8 Housing Choice Vouchers ? Eligibility (Material Weakness): Condition: A secondary review or approval of eligibility documentation was not being performed. Criteria: Someone other than the initial preparer of the eligibility calculations should be reviewing the information to ensure that all appropriate documentation has been received and input correctly. Questioned Costs: N/A Context: Although the Housing Authority implemented a new policy in October 2022 to ensure quality control reviews were performed for all eligibility decisions going forward, none of the 60 files selected for testing contained evidence of review by someone other than the preparer. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Housing Authority did not have a policy that required a secondary review or approval of eligibility documentation. Effect: Eligibility and associated housing assistance payment amounts could be calculated incorrectly. Recommendations: We recommend that the Housing Authority follow the new quality control policies and procedures implemented in the 4th quarter of 2022 to ensure that eligibility calculations are being reviewed by someone other than the preparer, and also that all required documentation is being maintained in tenant files. Views of Responsible Officials (Unaudited): Management agrees that this finding has already been addressed as noted in the recommendation. This is the same exact finding as 2021-006 in the prior year?s audit, which included a recommendation to add secondary review, which the Olathe Housing Authority implemented in 4Q 2022. While the new recommended control was implemented for all 4Q eligibility determinations, management understands that the files chosen for review were instead HCV files of voucher holders who began receiving rental assistance in 2022. Any applicant found eligible in 4Q 2022 did not begin receiving assistance until after receiving a voucher, signing a lease, and moving in, which did not occur until 1Q 2023. It is unfortunate that the auditors are required to once again choose files of HCV participants who had eligibility determined prior to implementing the recommended procedure change. Management understands that most of the HCV participant files that the auditors chose to review were from the exact same time period used during the prior year?s audit which made this finding a foregone conclusion. Management agrees that the control recommended in 2022 was not implemented until 2022, and so it remains just as true today as it was last year that files from many years ago continue to lack the control implemented in 2022. Management recommends that if files from prior to 2022 will continue to be reviewed for this control, and that if this finding is going to be repeatedly included, that auditor staff always review the prior year?s audit and always include an acknowledgement that the new secondary review control was implemented in 4Q 2022.
Finding 2022-003 ? Assistance #14.871 ? Section 8 Housing Choice Vouchers ? Special Tests: Selection from the Waiting List (Material Weakness): Condition: A secondary review of waiting list decisions was not being performed. In addition, it was noted that the wait list is only maintained for 3 years so evidence of wait list position for tenants that have been in the program for longer than 3 years could not be provided. Criteria: Tenant selection must include requirements for applications and waiting lists, a description of the policies for selection of applicant from the waiting list, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant. Questioned Costs: N/A Context: Although the Housing Authority implemented a new policy in October 2022 to ensure quality control reviews were performed for all waitlist decisions going forward, 46 of the 60 files selected for testing were for tenants that entered the program more than 3 years ago and therefore wait list support could not be provided. In addition, none of the tenant files contained evidence of review of the waitlist decision. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The Housing Authority did not have a policy that required a secondary review or approval of wait list documentation. Effect: Improper wait list decisions could be made. Recommendations: We recommend that the Housing Authority follow the new quality control policies and procedures implemented in the 4th quarter of 2022 to ensure that wait list documentation is being reviewed and approved, and also that a copy of the waitlist documentation be kept in each tenant file so that there is a historical record of the wait list process once the actual wait list is no longer being maintained. Views of Responsible Officials (Unaudited): Management agrees that this finding has already been addressed as noted in the recommendation. This is the same exact finding as 2021-007 in the prior year?s audit, which included a recommendation to add secondary review, which the Olathe Housing Authority implemented in 4Q 2022. While the new recommended control was implemented for all 4Q waiting list determinations, management understands that the files pulled for review were instead HCV files of voucher holders who began receiving rental assistance in 2022. Any eligible applicant pulled from the Waiting List in 4Q 2022 did not begin receiving assistance until after receiving a voucher, signing a lease, and moving in, which did not occur until 1Q 2023. It is unfortunate that the auditors are required to once again choose files of HCV participants who were pulled from the Waiting List prior to implementing the recommended procedure change. Management understands that most of the HCV participant files that the auditors chose to review were from the exact same time period used during the prior year?s audit which made this finding a foregone conclusion. Management agrees that the control recommended in 2022 was not implemented until 2022, and so it remains just as true today as it was last year that files from many years ago continue to lack the control implemented in 2022. Management recommends that if files from prior to 2022 will continue to be reviewed for this control, and that if this finding is going to be repeatedly included, that auditor staff always review the prior year?s audit and always include an acknowledgement that the new secondary review control was implemented in 4Q 2022.
Finding 2022-004 ? Assistance #21.027 ? Coronavirus State and Local Fiscal Recovery Funds ? Suspension and Debarment (Significant Deficiency): Condition: The contracts used by the City did not include required language or items related to suspension and debarment. Criteria: The City is required to perform a verification check, by checking SAM.gov, collecting a certification, or adding a clause to the covered transaction for each vendor. Questioned Costs: N/A Context: For 2 contracts tested, the City used a cooperative procurement contract but there was no evidence the City performed a verification check, collected a certification, or added a clause to the covered transaction for each vendor. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The City believed this step had already been completed by the government entity that was a party to the cooperative procurement contract. Effect: The City may not detect vendors who are suspended or debarred from receiving federal funds. Recommendations: Revise policies to ensure the City performs a verification check, collects a certification, or adds a clause to the covered transaction for each vendor receiving federal funds. Views of Responsible Officials (Unaudited): Management acknowledges that there was a lapse in procurement internal controls and duties related to the verification of vendors receiving Coronavirus State and Local Fiscal Recovery Funds due to staff turnover and new positions within the Procurement Division. Management is in the process of reviewing its internal controls, processes, and procedures related to procurement. Updated procedures will include the verification of vendors through SAM.gov, collecting a certification, or adding a clause to the covered transaction for each vendor receiving federal funds.
Finding 2022-005 ? Assistance #21.027 ? Coronavirus State and Local Fiscal Recovery Funds ? Procurement (Significant Deficiency): Condition: The contracts used by the city did not include required language related to procurement. Criteria: If a contract was entered into, the provisions of Appendix II of 2 CFR 200 were included as applicable provisions with the contract. Questioned Costs: N/A Context: For 2 contracts tested, the City used a cooperative procurement contract but there was no evidence the City included the required language related to procurement requirements. The sample size was determined based upon guidelines provided by the AICPA which is not a statistically valid sample. Cause: The City believed this step had already been completed by the government entity that was a party to the cooperative procurement contract. Effect: Vendors may not receive adequate communication of requirements for receiving federal funds. Recommendations: Revise policies to ensure the City includes the required procurement language in the contract for each vendor receiving federal funds. Views of Responsible Officials (Unaudited): Management acknowledges that there was a lapse in procurement internal controls and duties that resulted in contracts that received Coronavirus State and Local Fiscal Recovery Funds not including the provisions of Appendix II of 2 CFR 200. Management is in the process of updating its internal controls, processes, and procedures related to procurement and will update contract policies to include the provisions of Appendix II of 2 CFR 200 in all future contracts for vendors receiving federal funds.