FAC Explorer

Audit 56513

FY End
2022-09-30
Total Expended
$28.12M
Findings
4
Programs
10
Organization: Housing Authoirty of the City of Salem (OR)
Year: 2022 Accepted: 2023-07-13
Auditor: Novogradac & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
58704 2022-001 Significant Deficiency - E
58705 2022-002 Significant Deficiency - N
635146 2022-001 Significant Deficiency - E
635147 2022-002 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
14.871 Section 8 Housing Choice Vouchers $25.22M Yes 2
14.879 Mainstream Vouchers $1.11M Yes 0
14.850 Public and Indian Housing $679,359 - 0
14.872 Public Housing Capital Fund $315,517 - 0
14.896 Family Self-Sufficiency Program $284,622 - 0
14.231 Emergency Solutions Grant Program $227,716 - 0
14.249 Section 8 Moderate Rehabilitation Single Room Occupancy $147,395 - 0
14.239 Home Investment Partnerships Program $77,950 - 0
14.218 Community Development Block Grants/entitlement Grants $37,599 - 0
14.195 Section 8 Housing Assistance Payments Program $14,394 - 0

Contacts

Name Title Type
DDW3C3XPEPU8 Ryan Sullivan Auditee
5033733813 Rich Larsen Auditor
No contacts on file

Notes to SEFA

Accounting Policies: BASIS OF PRESENTATIONThe accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the Authority under programs of the federal government for the year ended September 30, 2022. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of operations of the Authority, it is not intended to and does not present the financial position, changes in net position or cash flows of the Authority. Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the financial statements.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESExpenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. INDIRECT COST RATEThe Authority has not elected to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate.

Finding Details

Finding 2022-001
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,723 Section 8 Housing Choice Vouchers units and 123 Mainstream Vouchers units. Of a sample size of forty-seven (47) tenant files, the following was noted: ? Lead based paint form was missing in 14 files ? Annual inspection report was missing in 1 file. Our sample size is statistically valid. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendations of the auditor and has issued several administrative advisories to staff in order to prevent future recurrence of similar issues. Due to the conditions of the COVID-19 pandemic, SHA was unable to contract a third party inspector to conduct inspections of units that it owns and operates, as required by HUD regulations. This led to a gap of more than 24 months between an initial inspection and a biennial inspection for a resident living in a SHA-owned unit. Inspections of SHA-owned units have since been completed under an agreement with a neighboring housing authority and will continue to be completed in accordance with HUD regulations and requirements going forward.
Finding 2022-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Programs Federal Catalog Numbers: 14.871 Noncompliance ? N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the 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)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were failed inspections that did not pass reinspection within 30 days without penalty. Context: There were approximately 741 failed inspections during the audit period. Of a sample size of twenty-five (25) failed inspections, four (4) failed inspections did not pass reinspection within 30 days. HAP was not abated nor was the tenant evicted. Our sample size is statistically valid. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed HQS inspections in compliance with program requirements following the expiration of HUD waivers as a result of insufficient staffing . Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement a corrective action plan that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor, and will make the several changes to its inspection process to ensure enforcement of Housing Quality Standards (or any subsequent replacement).
Finding 2022-001
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were documents that were unavailable for examination at the time of audit. Context: There are approximately 2,723 Section 8 Housing Choice Vouchers units and 123 Mainstream Vouchers units. Of a sample size of forty-seven (47) tenant files, the following was noted: ? Lead based paint form was missing in 14 files ? Annual inspection report was missing in 1 file. Our sample size is statistically valid. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendations of the auditor and has issued several administrative advisories to staff in order to prevent future recurrence of similar issues. Due to the conditions of the COVID-19 pandemic, SHA was unable to contract a third party inspector to conduct inspections of units that it owns and operates, as required by HUD regulations. This led to a gap of more than 24 months between an initial inspection and a biennial inspection for a resident living in a SHA-owned unit. Inspections of SHA-owned units have since been completed under an agreement with a neighboring housing authority and will continue to be completed in accordance with HUD regulations and requirements going forward.
Finding 2022-002
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Programs Federal Catalog Numbers: 14.871 Noncompliance ? N. Special Tests and Provisions - Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least annually to determine if the unit meets the 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)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were failed inspections that did not pass reinspection within 30 days without penalty. Context: There were approximately 741 failed inspections during the audit period. Of a sample size of twenty-five (25) failed inspections, four (4) failed inspections did not pass reinspection within 30 days. HAP was not abated nor was the tenant evicted. Our sample size is statistically valid. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed HQS inspections in compliance with program requirements following the expiration of HUD waivers as a result of insufficient staffing . Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement a corrective action plan that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor, and will make the several changes to its inspection process to ensure enforcement of Housing Quality Standards (or any subsequent replacement).