Audit 8813

2023-002 Condition: Deficiencies Noted in Examination of Section Eight Participant Files In a sample of Twenty-five (25) Section 8 Participant files the following deficiencies were noted: 3 files lacked timely annual recertifications FY 2023 1 file lacked support for income reported on the EIV Assistance Listing #: 14.871 Questioned Costs: None Criteria: 24 CFR § 982.405 requirements for PHA initial and periodic unit inspection. Cause/Effect: The Authority’s deficiencies in its resident files stems from a lack of certain controls concerning HUD requirements and procedures. The Authority has not been in complete compliance with HUD requirements. Recommendation: We recommend that the Authority review its internal control procedures over tenant file re-certifications. Reply: We concur with this finding and the Auditor’s recommendation.

2023-001 Condition: Deficit in Central Office Cost Center (COCC) The Authority continued to run a deficit in the Central Office Cost Center (COCC) primarily because of legacy costs (Health Insurance and Pension costs) associated with former employees, as required by long term state contracts. The Central Office Cost Center (COCC) has expended Low Income Public Housing (LIPH) funds to support the COCC operations in violation of Federal Rules and Regulations. Through the year ended March 31, 2023, the Authority has accumulated in excess of $5,036,173, in Central Office Cost Center (COCC) administrative operating costs above those normally covered by management fees, capital asset fees and bookkeeping fees. With the RAD conversion and corresponding sale of capital assets, this situation will be rectified with the final conversion of RAD. Assistance Listing #: 14.850 Questioned Costs: None Cause/Effect: Lack of oversight and long-range planning in accordance with HUD's requirements. Criteria: OMB-87 regarding eligible and ineligible costs. Recommendation: We recommend that the Authority continue to take the necessary steps budget and plan for future legacy costs. Reply: The Authority's continued conversion to private based ownership via tax credits and Rental Assistance Demonstration will ease the burden of capital need. Once all our properties are converted this issue will not exist.

2023-003 Condition: Deficiencies Noted in Examination of Low-Rent Public Housing Tenant Files In a sample of Twenty-five (25) Low Income Public Housing files the following deficiencies were noted: 7 files lacked timely annual recertifications FY 2023 2 files lacked support initial move in from the waiting list Assistance Listing #: 14.850 Questioned Costs: None Criteria: 24 CFR requirements for public housing eligibility Cause/Effect: The Authority failed to use the correct income amount for calculating rent. Dwelling rental income is incorrect. Recommendations: We recommend the Authority implement internal control procedures which will eliminate such errors. Reply: We will review the internal control procedures over tenant file re-certifications and documents. Management has implemented procedures along with staffing changes in order to clear this finding in FY 2023.

2023-004 Condition: Deficiencies Noted in Examination of Cash Disbursements and Procurement During the review of payments made during the fiscal year, it was noted that in ten (10) checks selected for audit the necessary procurement documentation was not provided. The two contractors identified that lacked compliance with the procurement policy were March Construction and Aulogix Inc. Assistance Listing #: 14.850 Questioned Costs: None Criteria: 24 CFR requirements for public housing disbursements and procurement. Cause/Effect: The Authority failed to follow the procurement policy for small purchases and large contract procurement. Recommendations: We recommend the Authority implement internal control procedures which will eliminate such errors. Reply: We will review the internal control procedures over procurement. Additionally, management has implemented procedures to clear this finding in FY 2023.

2023-002 Condition: Deficiencies Noted in Examination of Section Eight Participant Files In a sample of Twenty-five (25) Section 8 Participant files the following deficiencies were noted: 3 files lacked timely annual recertifications FY 2023 1 file lacked support for income reported on the EIV Assistance Listing #: 14.871 Questioned Costs: None Criteria: 24 CFR § 982.405 requirements for PHA initial and periodic unit inspection. Cause/Effect: The Authority’s deficiencies in its resident files stems from a lack of certain controls concerning HUD requirements and procedures. The Authority has not been in complete compliance with HUD requirements. Recommendation: We recommend that the Authority review its internal control procedures over tenant file re-certifications. Reply: We concur with this finding and the Auditor’s recommendation.

2023-001 Condition: Deficit in Central Office Cost Center (COCC) The Authority continued to run a deficit in the Central Office Cost Center (COCC) primarily because of legacy costs (Health Insurance and Pension costs) associated with former employees, as required by long term state contracts. The Central Office Cost Center (COCC) has expended Low Income Public Housing (LIPH) funds to support the COCC operations in violation of Federal Rules and Regulations. Through the year ended March 31, 2023, the Authority has accumulated in excess of $5,036,173, in Central Office Cost Center (COCC) administrative operating costs above those normally covered by management fees, capital asset fees and bookkeeping fees. With the RAD conversion and corresponding sale of capital assets, this situation will be rectified with the final conversion of RAD. Assistance Listing #: 14.850 Questioned Costs: None Cause/Effect: Lack of oversight and long-range planning in accordance with HUD's requirements. Criteria: OMB-87 regarding eligible and ineligible costs. Recommendation: We recommend that the Authority continue to take the necessary steps budget and plan for future legacy costs. Reply: The Authority's continued conversion to private based ownership via tax credits and Rental Assistance Demonstration will ease the burden of capital need. Once all our properties are converted this issue will not exist.

2023-003 Condition: Deficiencies Noted in Examination of Low-Rent Public Housing Tenant Files In a sample of Twenty-five (25) Low Income Public Housing files the following deficiencies were noted: 7 files lacked timely annual recertifications FY 2023 2 files lacked support initial move in from the waiting list Assistance Listing #: 14.850 Questioned Costs: None Criteria: 24 CFR requirements for public housing eligibility Cause/Effect: The Authority failed to use the correct income amount for calculating rent. Dwelling rental income is incorrect. Recommendations: We recommend the Authority implement internal control procedures which will eliminate such errors. Reply: We will review the internal control procedures over tenant file re-certifications and documents. Management has implemented procedures along with staffing changes in order to clear this finding in FY 2023.

2023-004 Condition: Deficiencies Noted in Examination of Cash Disbursements and Procurement During the review of payments made during the fiscal year, it was noted that in ten (10) checks selected for audit the necessary procurement documentation was not provided. The two contractors identified that lacked compliance with the procurement policy were March Construction and Aulogix Inc. Assistance Listing #: 14.850 Questioned Costs: None Criteria: 24 CFR requirements for public housing disbursements and procurement. Cause/Effect: The Authority failed to follow the procurement policy for small purchases and large contract procurement. Recommendations: We recommend the Authority implement internal control procedures which will eliminate such errors. Reply: We will review the internal control procedures over procurement. Additionally, management has implemented procedures to clear this finding in FY 2023.