Finding 2021-001: Payroll Documentation (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Activities Allowed and Unallowed/Allowable Costs
Criteria: The Authority should maintain appropriate controls over the payroll process to prevent or
detect inaccurate or unsupported costs.
Condition: The Authority's controls over the payroll process were not properly implemented, resulting
in employee files missing the approved salary or wage rate and hourly employees' timesheets not being
reviewed or approved.
Context: The Authority received approval by the Board of Commissioners of the salary and wage rates
but did not retain the documentation in the employee files. Further, the Authority did not obtain a
supervisor's review and approval of timesheets for hourly employees.
Effect: Payroll could be misstated for hourly employees claiming hours or overtime worked and/or for
employees paid a salary or wage that is unapproved by the Board.
Cause: The Authority's internal controls over the payroll process were not appropriately implemented
surrounding maintenance of employee files and timesheet review and approval.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure
that all employee files retain the latest approved salary or wage rate information and that every
timesheet is reviewed and approved by the hourly employee's supervisor.
Views of Responsible Officials: The Authority will review and enhance our policies and procedures
over payroll processing, to ensure all timesheets have visual approval by supervisor, and employee files
obtain copy of the annual board approved salary worksheet.
Finding 2021-002: Tenant File Maintenance (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Eligibility
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
obtain and review documentation supporting United States of America citizenship;
execute release and consent form approved by the Authority or the Department of Housing and
Urban Development ("HUD") authorizing any depository or private source of income, or any
Federal, State, or local agency, to furnish or release to HUD such information as the Authority or
HUD determines to be necessary; and
verify income listed on the HUD Form 50058.
The Authority is required to have controls in place to ensure recertifications are properly and timely
completed.
Condition: The Authority did not:
retain documentation supporting United States of America citizenship;
obtain proper authorization from tenants to release necessary information; and
obtain supporting documentation for the income listed on the HUD Form 50058.
The control over review and approval of the annual recertifications was not consistently applied.
Context: Of the 40 selections made, the Authority did not:
retain documentation supporting United States of America citizenship for 3 selections;
obtain proper authorization from tenants to release necessary information for 5 selections; and
obtain supporting documentation for the income listed on the HUD Form 50058 for 4 selections.
In reviewing the tenant files selected, review and approval of the annual recertifications was not evident
in some files.
Effect: The Authority was unable to demonstrate:
United States of America citizenship;
proper authorization from tenants to release necessary information;
the income listed on the HUD Form 50058 was accurate.
Recertifications could be improperly completed or missed altogether.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
documentation, authorization, and income support in its tenant files. The control over review and
approval of the annual recertifications was not properly implemented.
Repeat Finding: This is not a repeat finding.
Questioned Costs: $26,811
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
management obtains and reviews documentation supporting United States of America citizenship;
tenants provide release forms prior to obtaining necessary documentation;
management verifies income listed on the HUD Form 50058; and
recertifications are consistently reviewed and approved.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. The Authority has experienced
staff now in place to perform these services. The Authority will revisit our policy and procedures over
recertification and file maintenance to ensure documentation is maintained and is in compliance with
HUD regulations.
Finding 2021-003: Utility Allowance Schedules, HQS Inspections, and HAP Vouchers (Material
Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
review utility rate data at least annually and update the utility allowance schedule as necessary;
inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality
Standards ("HQS"); and
ensure the amounts billed on the Housing Assistance Payments ("HAP") vouchers match the
applicable HUD Form 50058.
Condition: The Authority did not:
provide updated utility allowance schedules;
inspect the units to determine if they meet HQS; and
provide HUD 50058 forms that support the applicable month's HAP voucher.
Context: Of the 40 selections made, the Authority did not:
provide updated utility allowance schedules for 11 selections;
provide support for inspections to determine if the unit met HQS for 34 selections; and
provide HUD 50058 forms that support the applicable month's HAP voucher for 2 selections.
Effect: The Authority was unable to demonstrate:
the utility allowance schedules were accurate;
the units met HQS; and
the HAP vouchers filed were accurate.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
utility allowance, HQS, and HAP voucher compliance requirements.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
the utility allowance schedules are reviewed and updated as necessary at least annually;
units are inspected annually under HQS; and
the amounts billed on the HAPs match the applicable HUD Form 50058.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. In addition the Authority
misinterpreted the COVID waiver related to HQS inspections. The Authority has experienced staff
now in place to perform these services. The Authority will revisit our policy and procedures over
recertification, HQS, and file maintenance to ensure documentation is maintained and is in compliance
with HUD regulations.
Finding 2021-004: Missing Depository Agreements (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: Per 24 CFR Section 982.156, housing authorities are required to enter into depository
agreements with their financial institutions in the form required by HUD.
Condition: The Authority did not set up depository agreements with its financial institution.
Context: The Authority has a financial institution that requires a depository agreement.
Effect: The Authority risks violating federal regulations, not maintaining proper safeguards over federal
funds, and not providing third-party rights to HUD.
Cause: The Authority did not have the internal controls over compliance or compliance procedures in
place to set up a depository agreement with its financial institution.
Repeat Finding: This finding is a repeat of 2020-001.
Questioned Costs: None.
Auditor's Recommendation: We recommend that the Authority review and enhance its internal controls
over compliance, policies and procedures regarding depository agreements with its financial institution
and obtain depository agreements with its financial institution.
Views of Responsible Officials: The Authority has addressed this finding. The Bank has signed the
depository agreements effective March 30, 2022.
Finding 2021-001: Payroll Documentation (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Activities Allowed and Unallowed/Allowable Costs
Criteria: The Authority should maintain appropriate controls over the payroll process to prevent or
detect inaccurate or unsupported costs.
Condition: The Authority's controls over the payroll process were not properly implemented, resulting
in employee files missing the approved salary or wage rate and hourly employees' timesheets not being
reviewed or approved.
Context: The Authority received approval by the Board of Commissioners of the salary and wage rates
but did not retain the documentation in the employee files. Further, the Authority did not obtain a
supervisor's review and approval of timesheets for hourly employees.
Effect: Payroll could be misstated for hourly employees claiming hours or overtime worked and/or for
employees paid a salary or wage that is unapproved by the Board.
Cause: The Authority's internal controls over the payroll process were not appropriately implemented
surrounding maintenance of employee files and timesheet review and approval.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure
that all employee files retain the latest approved salary or wage rate information and that every
timesheet is reviewed and approved by the hourly employee's supervisor.
Views of Responsible Officials: The Authority will review and enhance our policies and procedures
over payroll processing, to ensure all timesheets have visual approval by supervisor, and employee files
obtain copy of the annual board approved salary worksheet.
Finding 2021-002: Tenant File Maintenance (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Eligibility
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
obtain and review documentation supporting United States of America citizenship;
execute release and consent form approved by the Authority or the Department of Housing and
Urban Development ("HUD") authorizing any depository or private source of income, or any
Federal, State, or local agency, to furnish or release to HUD such information as the Authority or
HUD determines to be necessary; and
verify income listed on the HUD Form 50058.
The Authority is required to have controls in place to ensure recertifications are properly and timely
completed.
Condition: The Authority did not:
retain documentation supporting United States of America citizenship;
obtain proper authorization from tenants to release necessary information; and
obtain supporting documentation for the income listed on the HUD Form 50058.
The control over review and approval of the annual recertifications was not consistently applied.
Context: Of the 40 selections made, the Authority did not:
retain documentation supporting United States of America citizenship for 3 selections;
obtain proper authorization from tenants to release necessary information for 5 selections; and
obtain supporting documentation for the income listed on the HUD Form 50058 for 4 selections.
In reviewing the tenant files selected, review and approval of the annual recertifications was not evident
in some files.
Effect: The Authority was unable to demonstrate:
United States of America citizenship;
proper authorization from tenants to release necessary information;
the income listed on the HUD Form 50058 was accurate.
Recertifications could be improperly completed or missed altogether.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
documentation, authorization, and income support in its tenant files. The control over review and
approval of the annual recertifications was not properly implemented.
Repeat Finding: This is not a repeat finding.
Questioned Costs: $26,811
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
management obtains and reviews documentation supporting United States of America citizenship;
tenants provide release forms prior to obtaining necessary documentation;
management verifies income listed on the HUD Form 50058; and
recertifications are consistently reviewed and approved.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. The Authority has experienced
staff now in place to perform these services. The Authority will revisit our policy and procedures over
recertification and file maintenance to ensure documentation is maintained and is in compliance with
HUD regulations.
Finding 2021-003: Utility Allowance Schedules, HQS Inspections, and HAP Vouchers (Material
Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
review utility rate data at least annually and update the utility allowance schedule as necessary;
inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality
Standards ("HQS"); and
ensure the amounts billed on the Housing Assistance Payments ("HAP") vouchers match the
applicable HUD Form 50058.
Condition: The Authority did not:
provide updated utility allowance schedules;
inspect the units to determine if they meet HQS; and
provide HUD 50058 forms that support the applicable month's HAP voucher.
Context: Of the 40 selections made, the Authority did not:
provide updated utility allowance schedules for 11 selections;
provide support for inspections to determine if the unit met HQS for 34 selections; and
provide HUD 50058 forms that support the applicable month's HAP voucher for 2 selections.
Effect: The Authority was unable to demonstrate:
the utility allowance schedules were accurate;
the units met HQS; and
the HAP vouchers filed were accurate.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
utility allowance, HQS, and HAP voucher compliance requirements.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
the utility allowance schedules are reviewed and updated as necessary at least annually;
units are inspected annually under HQS; and
the amounts billed on the HAPs match the applicable HUD Form 50058.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. In addition the Authority
misinterpreted the COVID waiver related to HQS inspections. The Authority has experienced staff
now in place to perform these services. The Authority will revisit our policy and procedures over
recertification, HQS, and file maintenance to ensure documentation is maintained and is in compliance
with HUD regulations.
Finding 2021-004: Missing Depository Agreements (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: Per 24 CFR Section 982.156, housing authorities are required to enter into depository
agreements with their financial institutions in the form required by HUD.
Condition: The Authority did not set up depository agreements with its financial institution.
Context: The Authority has a financial institution that requires a depository agreement.
Effect: The Authority risks violating federal regulations, not maintaining proper safeguards over federal
funds, and not providing third-party rights to HUD.
Cause: The Authority did not have the internal controls over compliance or compliance procedures in
place to set up a depository agreement with its financial institution.
Repeat Finding: This finding is a repeat of 2020-001.
Questioned Costs: None.
Auditor's Recommendation: We recommend that the Authority review and enhance its internal controls
over compliance, policies and procedures regarding depository agreements with its financial institution
and obtain depository agreements with its financial institution.
Views of Responsible Officials: The Authority has addressed this finding. The Bank has signed the
depository agreements effective March 30, 2022.
Finding 2021-001: Payroll Documentation (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Activities Allowed and Unallowed/Allowable Costs
Criteria: The Authority should maintain appropriate controls over the payroll process to prevent or
detect inaccurate or unsupported costs.
Condition: The Authority's controls over the payroll process were not properly implemented, resulting
in employee files missing the approved salary or wage rate and hourly employees' timesheets not being
reviewed or approved.
Context: The Authority received approval by the Board of Commissioners of the salary and wage rates
but did not retain the documentation in the employee files. Further, the Authority did not obtain a
supervisor's review and approval of timesheets for hourly employees.
Effect: Payroll could be misstated for hourly employees claiming hours or overtime worked and/or for
employees paid a salary or wage that is unapproved by the Board.
Cause: The Authority's internal controls over the payroll process were not appropriately implemented
surrounding maintenance of employee files and timesheet review and approval.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure
that all employee files retain the latest approved salary or wage rate information and that every
timesheet is reviewed and approved by the hourly employee's supervisor.
Views of Responsible Officials: The Authority will review and enhance our policies and procedures
over payroll processing, to ensure all timesheets have visual approval by supervisor, and employee files
obtain copy of the annual board approved salary worksheet.
Finding 2021-002: Tenant File Maintenance (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Eligibility
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
obtain and review documentation supporting United States of America citizenship;
execute release and consent form approved by the Authority or the Department of Housing and
Urban Development ("HUD") authorizing any depository or private source of income, or any
Federal, State, or local agency, to furnish or release to HUD such information as the Authority or
HUD determines to be necessary; and
verify income listed on the HUD Form 50058.
The Authority is required to have controls in place to ensure recertifications are properly and timely
completed.
Condition: The Authority did not:
retain documentation supporting United States of America citizenship;
obtain proper authorization from tenants to release necessary information; and
obtain supporting documentation for the income listed on the HUD Form 50058.
The control over review and approval of the annual recertifications was not consistently applied.
Context: Of the 40 selections made, the Authority did not:
retain documentation supporting United States of America citizenship for 3 selections;
obtain proper authorization from tenants to release necessary information for 5 selections; and
obtain supporting documentation for the income listed on the HUD Form 50058 for 4 selections.
In reviewing the tenant files selected, review and approval of the annual recertifications was not evident
in some files.
Effect: The Authority was unable to demonstrate:
United States of America citizenship;
proper authorization from tenants to release necessary information;
the income listed on the HUD Form 50058 was accurate.
Recertifications could be improperly completed or missed altogether.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
documentation, authorization, and income support in its tenant files. The control over review and
approval of the annual recertifications was not properly implemented.
Repeat Finding: This is not a repeat finding.
Questioned Costs: $26,811
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
management obtains and reviews documentation supporting United States of America citizenship;
tenants provide release forms prior to obtaining necessary documentation;
management verifies income listed on the HUD Form 50058; and
recertifications are consistently reviewed and approved.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. The Authority has experienced
staff now in place to perform these services. The Authority will revisit our policy and procedures over
recertification and file maintenance to ensure documentation is maintained and is in compliance with
HUD regulations.
Finding 2021-003: Utility Allowance Schedules, HQS Inspections, and HAP Vouchers (Material
Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
review utility rate data at least annually and update the utility allowance schedule as necessary;
inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality
Standards ("HQS"); and
ensure the amounts billed on the Housing Assistance Payments ("HAP") vouchers match the
applicable HUD Form 50058.
Condition: The Authority did not:
provide updated utility allowance schedules;
inspect the units to determine if they meet HQS; and
provide HUD 50058 forms that support the applicable month's HAP voucher.
Context: Of the 40 selections made, the Authority did not:
provide updated utility allowance schedules for 11 selections;
provide support for inspections to determine if the unit met HQS for 34 selections; and
provide HUD 50058 forms that support the applicable month's HAP voucher for 2 selections.
Effect: The Authority was unable to demonstrate:
the utility allowance schedules were accurate;
the units met HQS; and
the HAP vouchers filed were accurate.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
utility allowance, HQS, and HAP voucher compliance requirements.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
the utility allowance schedules are reviewed and updated as necessary at least annually;
units are inspected annually under HQS; and
the amounts billed on the HAPs match the applicable HUD Form 50058.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. In addition the Authority
misinterpreted the COVID waiver related to HQS inspections. The Authority has experienced staff
now in place to perform these services. The Authority will revisit our policy and procedures over
recertification, HQS, and file maintenance to ensure documentation is maintained and is in compliance
with HUD regulations.
Finding 2021-004: Missing Depository Agreements (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: Per 24 CFR Section 982.156, housing authorities are required to enter into depository
agreements with their financial institutions in the form required by HUD.
Condition: The Authority did not set up depository agreements with its financial institution.
Context: The Authority has a financial institution that requires a depository agreement.
Effect: The Authority risks violating federal regulations, not maintaining proper safeguards over federal
funds, and not providing third-party rights to HUD.
Cause: The Authority did not have the internal controls over compliance or compliance procedures in
place to set up a depository agreement with its financial institution.
Repeat Finding: This finding is a repeat of 2020-001.
Questioned Costs: None.
Auditor's Recommendation: We recommend that the Authority review and enhance its internal controls
over compliance, policies and procedures regarding depository agreements with its financial institution
and obtain depository agreements with its financial institution.
Views of Responsible Officials: The Authority has addressed this finding. The Bank has signed the
depository agreements effective March 30, 2022.
Finding 2021-001: Payroll Documentation (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Activities Allowed and Unallowed/Allowable Costs
Criteria: The Authority should maintain appropriate controls over the payroll process to prevent or
detect inaccurate or unsupported costs.
Condition: The Authority's controls over the payroll process were not properly implemented, resulting
in employee files missing the approved salary or wage rate and hourly employees' timesheets not being
reviewed or approved.
Context: The Authority received approval by the Board of Commissioners of the salary and wage rates
but did not retain the documentation in the employee files. Further, the Authority did not obtain a
supervisor's review and approval of timesheets for hourly employees.
Effect: Payroll could be misstated for hourly employees claiming hours or overtime worked and/or for
employees paid a salary or wage that is unapproved by the Board.
Cause: The Authority's internal controls over the payroll process were not appropriately implemented
surrounding maintenance of employee files and timesheet review and approval.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure
that all employee files retain the latest approved salary or wage rate information and that every
timesheet is reviewed and approved by the hourly employee's supervisor.
Views of Responsible Officials: The Authority will review and enhance our policies and procedures
over payroll processing, to ensure all timesheets have visual approval by supervisor, and employee files
obtain copy of the annual board approved salary worksheet.
Finding 2021-002: Tenant File Maintenance (Material Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Eligibility
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
obtain and review documentation supporting United States of America citizenship;
execute release and consent form approved by the Authority or the Department of Housing and
Urban Development ("HUD") authorizing any depository or private source of income, or any
Federal, State, or local agency, to furnish or release to HUD such information as the Authority or
HUD determines to be necessary; and
verify income listed on the HUD Form 50058.
The Authority is required to have controls in place to ensure recertifications are properly and timely
completed.
Condition: The Authority did not:
retain documentation supporting United States of America citizenship;
obtain proper authorization from tenants to release necessary information; and
obtain supporting documentation for the income listed on the HUD Form 50058.
The control over review and approval of the annual recertifications was not consistently applied.
Context: Of the 40 selections made, the Authority did not:
retain documentation supporting United States of America citizenship for 3 selections;
obtain proper authorization from tenants to release necessary information for 5 selections; and
obtain supporting documentation for the income listed on the HUD Form 50058 for 4 selections.
In reviewing the tenant files selected, review and approval of the annual recertifications was not evident
in some files.
Effect: The Authority was unable to demonstrate:
United States of America citizenship;
proper authorization from tenants to release necessary information;
the income listed on the HUD Form 50058 was accurate.
Recertifications could be improperly completed or missed altogether.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
documentation, authorization, and income support in its tenant files. The control over review and
approval of the annual recertifications was not properly implemented.
Repeat Finding: This is not a repeat finding.
Questioned Costs: $26,811
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
management obtains and reviews documentation supporting United States of America citizenship;
tenants provide release forms prior to obtaining necessary documentation;
management verifies income listed on the HUD Form 50058; and
recertifications are consistently reviewed and approved.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. The Authority has experienced
staff now in place to perform these services. The Authority will revisit our policy and procedures over
recertification and file maintenance to ensure documentation is maintained and is in compliance with
HUD regulations.
Finding 2021-003: Utility Allowance Schedules, HQS Inspections, and HAP Vouchers (Material
Weakness)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: In accordance with various subsections of 24 CFR Section 982, the Authority is required to:
review utility rate data at least annually and update the utility allowance schedule as necessary;
inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality
Standards ("HQS"); and
ensure the amounts billed on the Housing Assistance Payments ("HAP") vouchers match the
applicable HUD Form 50058.
Condition: The Authority did not:
provide updated utility allowance schedules;
inspect the units to determine if they meet HQS; and
provide HUD 50058 forms that support the applicable month's HAP voucher.
Context: Of the 40 selections made, the Authority did not:
provide updated utility allowance schedules for 11 selections;
provide support for inspections to determine if the unit met HQS for 34 selections; and
provide HUD 50058 forms that support the applicable month's HAP voucher for 2 selections.
Effect: The Authority was unable to demonstrate:
the utility allowance schedules were accurate;
the units met HQS; and
the HAP vouchers filed were accurate.
Cause: The Authority's internal controls in place did not prevent the Authority from missing required
utility allowance, HQS, and HAP voucher compliance requirements.
Repeat Finding: This is not a repeat finding.
Questioned Costs: None.
Auditor's Recommendation: The Authority should review and enhance its internal controls to ensure:
the utility allowance schedules are reviewed and updated as necessary at least annually;
units are inspected annually under HQS; and
the amounts billed on the HAPs match the applicable HUD Form 50058.
Views of Responsible Officials: The Authority specialist responsible for file maintenance and
recertifications during fiscal year 2021 is no longer with the Agency. In addition the Authority
misinterpreted the COVID waiver related to HQS inspections. The Authority has experienced staff
now in place to perform these services. The Authority will revisit our policy and procedures over
recertification, HQS, and file maintenance to ensure documentation is maintained and is in compliance
with HUD regulations.
Finding 2021-004: Missing Depository Agreements (Significant Deficiency)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Title: Housing Choice Voucher Cluster
Federal Assistance Listing Number: 14.871
Compliance Requirement: Special Tests and Provisions
Criteria: Per 24 CFR Section 982.156, housing authorities are required to enter into depository
agreements with their financial institutions in the form required by HUD.
Condition: The Authority did not set up depository agreements with its financial institution.
Context: The Authority has a financial institution that requires a depository agreement.
Effect: The Authority risks violating federal regulations, not maintaining proper safeguards over federal
funds, and not providing third-party rights to HUD.
Cause: The Authority did not have the internal controls over compliance or compliance procedures in
place to set up a depository agreement with its financial institution.
Repeat Finding: This finding is a repeat of 2020-001.
Questioned Costs: None.
Auditor's Recommendation: We recommend that the Authority review and enhance its internal controls
over compliance, policies and procedures regarding depository agreements with its financial institution
and obtain depository agreements with its financial institution.
Views of Responsible Officials: The Authority has addressed this finding. The Bank has signed the
depository agreements effective March 30, 2022.