Audit 56178

2022-001 Operating Budget Revision Not approved by Board of Commissioners for Operating Expenses that exceeded the Originally Approved Budget (Special Tests and Provisions) Criteria: In accordance with the Authority?s Annual Contributions Contract (ACC), the Authority is required to prepare and approve a Public Housing Operating Budget Revision for any operating expenses not previously budgeted for. Condition: The Authority?s actual expenditures exceeded its budgeted expenditures by $255,726. Questioned Costs: None. Effect: The Authority had $255,726 in unbudgeted operating expenditures. Cause: The Authority did not have procedures in place to review actual expenditures for the year to the amount of budgeted expenditures. Recommendation: The Authority should establish a process whereby the operating expenditures are reviewed by the Authority?s Board of Commissioners to determine if a budget revision is needed to be approved before the end of its fiscal year. Management Response: We will implement a process to review operating expenditures frequently to ensure that operating expenditures do not exceed approved budgeted expenditures. When actual expenditures exceed budgeted expenditures, the Authority will approve a budget revision to cover actual expenditures.

2022-002 Internal Controls over Documentation in Tenant Files (Eligibility) Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that the amount of rent charged to tenants are calculated according to HUD rules and regulations. Condition: The authority had the following noncompliance instances out of the 17 tenant files selected for testing: ? 1 file did not have the appropriate annual recertification performed ? 5 files did not contain a signed lease by the tenant ? 10 files did have any income verifications performed ? 3 files did not contain appropriate verification of social security numbers of household members ? 4 files did not contain a current Form 9886 ? 4 files did not have the signed citizenship forms ? 17 files did not have the annual rent determination forms ? 15 files did not have the appropriate lead based paint acknowledgement forms Questioned Costs: None. Effect: The Authority is not in compliance with applicable HUD regulations regarding tenant eligibility and rent calculations. Cause: The Authority does not have proper procedures in place related to tenant certification and does not have a review procedure in place to detect errors timely. Recommendation: The Authority should establish proper procedures to insure that the Authority is in compliance with HUD rules for verification of tenant information and calculation of tenant rent. In addition, the Authority should implement review procedures in order to detect errors timely. Management Response: We will implement controls and procedures to ensure proper verification of tenant information and rent calculations are performed. We will also implement a review process to detect errors timely.

2022-001 Operating Budget Revision Not approved by Board of Commissioners for Operating Expenses that exceeded the Originally Approved Budget (Special Tests and Provisions) Criteria: In accordance with the Authority?s Annual Contributions Contract (ACC), the Authority is required to prepare and approve a Public Housing Operating Budget Revision for any operating expenses not previously budgeted for. Condition: The Authority?s actual expenditures exceeded its budgeted expenditures by $255,726. Questioned Costs: None. Effect: The Authority had $255,726 in unbudgeted operating expenditures. Cause: The Authority did not have procedures in place to review actual expenditures for the year to the amount of budgeted expenditures. Recommendation: The Authority should establish a process whereby the operating expenditures are reviewed by the Authority?s Board of Commissioners to determine if a budget revision is needed to be approved before the end of its fiscal year. Management Response: We will implement a process to review operating expenditures frequently to ensure that operating expenditures do not exceed approved budgeted expenditures. When actual expenditures exceed budgeted expenditures, the Authority will approve a budget revision to cover actual expenditures.

2022-002 Internal Controls over Documentation in Tenant Files (Eligibility) Criteria: HUD regulations require that the Authority perform certain prescribed verification procedures and obtain the required documentation to assure that tenants qualify for low income housing and that the amount of rent charged to tenants are calculated according to HUD rules and regulations. Condition: The authority had the following noncompliance instances out of the 17 tenant files selected for testing: ? 1 file did not have the appropriate annual recertification performed ? 5 files did not contain a signed lease by the tenant ? 10 files did have any income verifications performed ? 3 files did not contain appropriate verification of social security numbers of household members ? 4 files did not contain a current Form 9886 ? 4 files did not have the signed citizenship forms ? 17 files did not have the annual rent determination forms ? 15 files did not have the appropriate lead based paint acknowledgement forms Questioned Costs: None. Effect: The Authority is not in compliance with applicable HUD regulations regarding tenant eligibility and rent calculations. Cause: The Authority does not have proper procedures in place related to tenant certification and does not have a review procedure in place to detect errors timely. Recommendation: The Authority should establish proper procedures to insure that the Authority is in compliance with HUD rules for verification of tenant information and calculation of tenant rent. In addition, the Authority should implement review procedures in order to detect errors timely. Management Response: We will implement controls and procedures to ensure proper verification of tenant information and rent calculations are performed. We will also implement a review process to detect errors timely.