Corrective Action Plans

With the implementation of the new software, Yardi Voyager 7s, a plan is in place to develop Standard Operating Procedures that are consistent with the City of Pittsburg’s Standard Operating Procedures. The Housing Authority Staff is updating the Administrative Plan to address operational procedures and the Finance Department Staff are developing procedures for internal control and transactional review. The Housing Authority has and will continue to provide resources for training and education. The budget for Fiscal Year 2023-2024 includes an increased allocation for Staff Training. Source documents have been collected and data is under review. We have engaged our former Accountant II to assist with corrections for December 2021-June 2022. The current Accountant II is finalizing an open ticket with Yardi to correct errors to the software-generated VMS report for July 2022-November 2022. The reporting errors have been identified as originating from an improper account set up during initial implementation. We have opened a ticket with the software vendor and the Yardi Development team is reviewing our findings.

Federal Agency Name: U.S. Department of Housing and Urban Development Program Name: Mortgage Insurance Rental Housing Federal Financial Assistance Listing: #14.134 Finding Summary: Testing performed by the auditors relating to testing of property, operations, and distributions detected one instance where a disbursement of Project funds was not supported with a detailed receipt. Responsible Individuals: Sue Lund, Administrator Corrective Action Plan: The Project will implement new form for invoice approval completion which includes ensuring proper documentation is obtained and retained before disbursement of funds occurs. Anticipated Completion Date: May 31, 2024

The Health Center will consult with HHS as to whether re-submittal of the Provider Relief Fund Reporting Portal is appropriate.

The City has studied its existing procedures and Information Technology (IT) resources in relation to the three noted exceptions. We have identified how the City’s procedures for inspectors lead to the exceptions and the conditions that allowed for the documentation and evidence of resolved inspection failures to be insufficient: • Since 2017, the City has served as a demonstration agency for what is now HUD’s final National Standards for the Physical Inspection of Real Estate (NSPIRE). The purpose of the demonstration was to conduct Housing Quality Standards (HQS) inspections and inspections under the test protocol simultaneously, with some inspectors using HQS and some inspectors using the test standards. The test standards were conducted using electronic devices so the inspection results could be communicated to HUD, and the HQS inspections continued to be documented using HUD Form 52580. • Utilizing two methodologies for inspection documentation over a time span of greater than five years lead to inconsistent training of new staff, and inconsistent methods and expectations for documenting failed inspection results and follow up. • This condition was exacerbated in Calendar Year 2021 and 2022 when the City began the “catch-up” inspections required by HUD after the COVID-19 inspection waivers. To resolve these issues and correct the conditions going forward, the City will: • Design and implement an inspection application (app) to be used on the inspectors’ mobile devices. The app will be based on HUD’s new NSPIRE Inspection Tool and Checklist. This document has not been assigned a HUD Form number, but is available for review on HUD’s NSPIRE website. The app will be functional on mobile devices even when there is no cellular signal or WiFi connectivity by storing the data, which will be downloaded by the inspector. • The app will include the following features to ensure that documentation is completed properly and timely: - An electronic signature will be required for all inspections, regardless of whether the inspection passed or failed. - An auto-generated summary report of the day’s failed inspections will be emailed to the Supervisors and to the inspector who completed the failed inspection. The report will include the family and owner name, the unit address, identification of the failed items, to whom the responsibility for resolving the failed item is assigned (either family or owner), and the deadline by which the failed items must be resolved. - An auto-generated letter to the family and owner will be mailed and/or emailed within 2 business days of the completed inspection. The letter will include the family and owner name, the unit address, identification of the failed items, to whom the responsibility for resolving the failed item is assigned (either family or owner), the deadline by which the failed items must be resolved, and the potential date of termination if the failed inspection is not resolved. This letter will replace the Failed Inspection Memo which is currently being used by the City to communicate inspection failures. - The app will send email notifications to the Supervisors and inspector beginning 10 days in advance of the repair deadline reminding them that the inspection has not been resolved. - The inspector will use the app to document the resolution of the inspection by indicating what evidence the inspector used to demonstrate the repaired/resolved item. - The inspector will use the app to assign an extension of the deadline when necessary and appropriate. - If a failed inspection has not passed by the deadline or extension, the app will alert the inspector and Supervisor to either document the resolved inspection items or begin the termination process. The City believes that automating these aspects of the failed inspection procedures will prevent the conditions noted in the audit findings by streamlining documentation for the inspectors, alerting supervisors of failed inspections, and providing a consolidated report across all inspectors that can be reviewed regularly. The City has already started the inspection app design process with the IT department, capitalizing and expanding on an existing app that inspectors use for scheduling inspections. When the inspection app is ready to test, the lead inspector, Sylvia Coombs, will begin using it immediately and communicate any feedback to Elizabeth Durham, Rebecca Lane and the IT department. The City anticipates the app will be ready for testing by March 31, 2024. When the app has been tested and refined, Sylvia Coombs and Elizabeth Durham will train the staff in its use and communicate the requirement and expectation that the app is replacing the paper HUD Form 52580 and the Failed Inspection Memo. This change will be implemented by April 30, 2024. Elizabeth Durham and Rebecca Lane will be responsible for monitoring the results of these changes. Responsible Party: Elizabeth Durham Acting Manager Housing and Community Services Department Rebecca Lane Program Specialist Housing and Community Services Department Anticipated Implementation Date: April 30, 2024

Corrective action plan: • On the first Friday of each month, the Housing Choice Voucher Program staff meets to discuss program policies and procedures for training purposes. At each meeting, specific aspects of administering the program are reviewed, along with the related HUD policies. Staff members are given the opportunity to ask any questions on any procedures or policies they may not understand. Activities from the Nan McKay Rent Calculation training are passed out to staff to complete individually. After staff completes the activity, the answers are reviewed as a group. Other activities take place which involve the staff answering questions regarding various case studies of situations that may occur in the daily activities of administering the HCV Program. • January 9th – 11th, all HCV and PBV Specialist received Combo HCV/LIPH Rent Calculation training with HOTMA updates from Nan McKay and Associates. • Review and update Administrative Plan/SOP with Policies and Procedures to ensure all staff is familiar with policies and procedures. • Staff restructuring • In-service meetings with Compliance Specialist as staff challenges some write ups of deficiencies to ensure that there are mutual understandings of policies. • HCV/Occupancy Specialists have been instructed to triple check all certifications for accuracy to mitigate the possibility for careless errors PERSONS INVOLVED HCV Case Management Staff Asset Manager RAD Project Based Voucher Community Manager Compliance Specialist Compliance Supervisor HCV Program Director Occupancy Specialist MONITORING The Compliance Supervisor and Specialist will continue to monitor files. The Compliance Supervisor and Specialist will begin adding the CFR Regulation and or Administrative Plan Policy and page number to each deficiency write-up to assist staff in understanding the error so that staff will not make consistent errors. The Compliance Supervisor will provide to staff recommendations for improvement. It is hopeful that a greater number of participant files will be audited throughout the year for both the HCV Program and for the PBV communities. On the first Friday of each month, the Housing Choice Voucher Program staff meets to discuss program policies and procedures for training purposes. During these meetings specific aspects of administering the program are reviewed, along with the related HUD policies. Staff members are given the opportunity to ask any questions on procedures or policies they may not understand. During many meetings, activities from the Nan McKay Rent Calculation training are passed out to staff to complete individually. After staff completes the activity, the answers are reviewed as a group. Staff also answers questions regarding various case studies that may occur in the daily activities of administering the HCV Program. We also have NRHA’s Compliance staff provide training to review common errors and to discuss any areas staff may have that are gray with audited files. Staff has also gone through an intensive training on the common errors per NRHA’s Compliance Department. Quarterly Quality Control trainings are held with caseworkers lead by the NRHA Compliance Department to address concerns and common errors. The Admission and Continued Occupancy Policies (ACOP) and Administrative Plan policies and procedures are reviewed to ensure that all staff has a clear understanding of the proper ways of calculating income, applying allowances, using proper payment standards, and approvals of lease ups and completion of certifications. A departmental quality control team was established to ensure there is consistency of policies and procedures and that when new procedures are implemented the processes are properly documented and disseminated to all staff. A departmental quality control sub-team was formed after the audit to include the actual custodians of program participant files comprised of:  1 Tax Credit PBV Property Manager  1 LIPH Property Manager  1 Compliance Specialist  1 Occupancy Specialist  1 Senior HCV Specialist  1 Tax Credit Administrative Assistant NRHA Caseworkers and Administrative Staff have been instructed to triple check all certifications for accuracy to mitigate the possibility for careless errors. The NRHA Compliance Department continues to audit files for the HCV Program to ensure that files are being processed properly; income calculated correctly, verifications are in the file, HAP payments issued are correct, and that units are inspected timely. Findings are noted and must be corrected by the Case Worker or Administrative Staff and the file is reevaluated by the Compliance Department to ensure findings were corrected. NRHA Caseworkers and Administrative Staff have been instructed to triple check all certifications for accuracy to mitigate the possibility for careless errors. The NRHA Compliance Department continues to audit files for the HCV Program to ensure that files are being processed properly; income calculated correctly, verifications are in the file, HAP payments issued are correct, and that units are inspected timely. Findings are noted and must be corrected by the Case Worker or Administrative Staff and the file is reevaluated by the Compliance Department to ensure findings were corrected. NRHA will continue to investigate the possibility of increasing the number of program participant files reviewed by the Compliance Department. NRHA has begun contract negotiations with a new software vendor. It is the feeling of the agency that with a different software platform the errors being made will lessen as the information gathered to perform rent calculations will be in a more automated form. It is anticipated that this will lessen staff time needed to enter the information and thus allow for more time to be spent verifying accuracy of information. The timeline for implementation is for the software to be live at the beginning of the 2026 fiscal year. This over-riding strategy is to be done in conjunction with the steps outlined below to mitigate this situation.

Planned Corrective Action: Implement accounting system to track federal awards; Reconcile general ledger to award amounts and to reimbursement requests.The organization purchased and is currently implementing a new accounting system which utilizes fund accounting and separate general ledger accounts for each award. Processes and procedures will be implemented to reconcile award amounts and reimbursement requests to each award within the general ledger. Additional supporting schedules will also continue to be maintained to reconcile to the general ledger.

FINDING NO. 2022-003 Statement of Condition: Management made an unauthorized withdrawal of $4,400 from the residual receipts account during the fiscal year ended June 30, 2022; the funds have not been returned to the residual receipts account. Auditor Recommendation: Management should deposit $4,400 into the residual receipts account to refund the unapproved withdrawal. S3800-150: Action Taken: Management agrees with the finding, and has taken corrective actions which include communication with the Project Accountant and Regional Manager and will transfer $4,400 from the operating account to the residual receipts account.

FINDING NO. 2023-002 Statement of Condition: Management only made nine (9) of the twelve (12) monthly required reserve deposits, leaving the account underfunded by $4,053 at June 30, 2022; for the year ended june 30, 2023, only $2,702 of the required $16,212 in deposits were made, leaving the account behind schedule by another $13,510, for a total deficiency of $17,563. Auditor Recommendation: Management agrees with the finding, and has taken corrective actions which include communication with the Project Accountant and Regional Manager. All future deposits the replacement reserve will be made as required in the regulatory agreement. Action Taken: Senior management has discussed the deficiency with the Project Accountant and Regional Manager. All future deposits the replacement reserve will be made as required in the regulatory agreement assuming there is sufficient cash in the operating account to make the deposit. -

Management concurs with the auditor's findings and recommendations. The management agent is making several organizational changes to help track and monitor compliance with contracts and agreements.

Contact Person Dara Lee, Executive Director of Clay County HRA (Authorized Representative and Agent) Corrective Action Plan Error occurred due to lack of oversight in review of tenant files. Planned Completed Date for CAP Immediately

Finding 2023-002: Quality Control Inspections Recommendation: The Authority should implement procedures to ensure that all housing quality control inspections are being performed timely, as required by HUD and the Uniform Guidance. Action Taken: The Authority has staff members that are HQS certified that will perform quality control inspections. The Authority continues to perform all quality control inspections as required by HUD and the Uniform Guidance.

Identifying Number: 2023-001: Adjustments to Project Rental Assistance Payments Condition/Finding: During our review of eligibility testing support, we noted that for the tenant’s annual reexaminations and certifications under HUD Project Rental Assistance Contract Number FL29-S951-006, the incorrect amount of contract rent was being utilized on the forms to calculate the projects tenant assistance payment. The Project incorrectly double counted the utility allowance of $51 and was using a gross rent rate of $833 to calculate the tenant rental assistance payment when it should have only used a gross rent rate of $782 per the contact. This resulted in the Project requesting a tenant rental assistance payment that was $51 more than what it should have been for each tenant on the Housing Owner’s Certification and Application for Housing Assistance Payments (HAP) for 3 months of fiscal year 2023. Upon the Project’s analysis, it was determined that the total amount of the error, net of vacancies, was $14,724. Corrective Action Taken or Planned: Management has established procedures to ensure that there is a better process to check the amounts of contract rent being approved on the re-examinations and certifications of tenants. This includes, but is not limited to, an additional review step and control for confirmation of the correct contracted and billed amounts. These additional procedures also include processes with more closely reviewed monthly HAP forms by the appropriate personnel to ensure that the amounts being requested of HUD are in line with the appropriate contract rates. Corrective action has been implemented with all corrections approved by and reconciled with HUD. This has already been fully implemented at the organization as of the date of this letter. The primary designated official is the Chief Financial Officer. With our best regards, Paul Dennison Chief Financial Officer

Finding 2023-001 Condition The Corporation lacks proper segregation of duties with respect to the calculation of lost revenue. Proper segregation of duties is necessary to prevent a situation where one individual handles a transaction from beginning to end in order to reduce the potential for noncompliance due to error or fraud. During the audit of the lost revenue calculation, six months out of fifty-six were input incorrectly into the calculation from the source documents in error. Using the correct revenue amounts for those six months results in a higher total of lost revenue for the period. As a result of the lack of proper segregation of duties, noncompliance due to error or fraud could occur without being detected and corrected, timely. Corrective Action Plan Corrective Action Planned: The Corporation will have more than one person complete a full review of the lost revenue calculation for each report submission. After the information is gathered and reported by the Chief Financial Officer (CFO) but before the information is submitted, the Controller will be asked to review the data. After review and documentation that there has been a review, the reporting will be submitted. Name(s) of Contact Person(s) Responsible for Corrective Action: Brent Foster, Chief Financial Officer Anticipated Completion Date: Review process will be implemented immediately.

Finding Description: There was a significant audit adjustment pertaining to housing assistance payment revenue that was required in order to properly state certain account balance in accordance with U.S. GAAP. Corrective Action Taken or Planned: A secondary supervisory review and approval of the housing assistance payment vouchers conducted by the CFO will now be required before authorization for billing can be granted to the third party vendor for billing to HUD. Contact Person Responsible for Corrective Action: Danny Rosario, CFO Anticipated Completion Date: March 31, 2024

The personnel activity reports (PARs) for May and June were singed off in the first week of May before the time was charged to the grant. PARs are required to be an after the fact look book. So they should be completed either the last day of the month or shortly after in the preceding month. Response: The district has created a checklist of the requirements for all salaries paid from federal funds that meets the standards outlines in Subsection 8.h. (5) of the 0MB Circular A-87 Part 225 Appendix B. In doing so the district will obtain signatures on the Personnel activity report (PAR) within two weeks of the last day of the previous month. The district has since adopted this practice for the 2024-2025 school year Implementation Date: July 2023 Person Responsible for the Implementation: Kayla Hughes, School District Business Administrator

Corrective Action Plan: The University will take immediate action to address the findings of the audit report. As part of the University’s holistic program to improve compliance and assurance, the institution has requested a position number from the State of South Carolina Human Resource office in the area of internal auditing along with developing a budget line item for this operation. Moving forward, the new internal auditor position will provide needed leadership on all corrective action plans as necessary. The internal auditor will be the point of contact for all audit related matters, thus providing needed onsite management for compliance related issues for the University and its affiliated agencies. Management and implementation of current corrective plans are critical to the compliance efforts of the University: To ensure that future reporting of the CARES HEERF funding is posted timely, and in the required format, the University’s Controller, Financial Aid Director and Vice President of Finance and Administration/Chief Finance Officer (CFO) will conduct a monthly review and/or periodically check the Department of Education CARES HEERF FAQs for updates and new requirements. This monthly review process will be overseen by the Assistant Provost for Sponsored Programs, who will function as a neutral third party. In short, the University will enhance our oversight and management of the corrective action plans through the new internal audit team until this matter has been resolved. During the prior reporting periods under review, the University was in the process of submitting and seeking approval of a no-cost extension. During this same period that is under review, the University closed out the current “HEERF” grant and was awarded a “no-cost” extension from the Department of Education. In the University’s attempt to secure a “no-cost” extension from the Department of Education, the reporting schedules under review were developed but not posted to the University’s website as required. The oversight of the reporting process will be a key performance indicator for the internal audit team as we prepare for the “no-cost” extension phase of the grant. Anticipated Completion Date: June 30, 2024

SIGNIFICANT DEFICIENCY 2023-003 Section 8 Housing Choice Voucher Cluster – Assistance Listing No. 14.871 Recommendation: We recommend the County review and enhance its internal controls, policies, and procedures to ensure that the amounts included on the FDS are accurate. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The department will modify its SOP to include a second reviewer before the final FDS figures are submitted. The first submission is due in August and the final submission is due in March. Name(s) of the contact person(s) responsible for corrective action: Mike Kapa Planned completion date for corrective action plan: June 30, 2024

Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs and will implement internal control procedures that will ensure compliance with federal regulations. Melissa Beadle, Deputy Director, will be responsible for implementing this corrective action by June 30, 2024. CMHA is aware that the HAB/MRI software does not store waitlist reports by date processed and since then, CMHA has been saving Excel files of the waitlist reports. The applicants that were selected for the audit were applicants that had preference points. All applicants with preference points were contacted at the same time to be informed that they were eligible for a voucher. The CMHA waitlists were ran by preference points and time/date of application. Once those applicants were pulled the waitlist was not saved to Excel. The preference point list was then sorted alphabetically for sign in purposes and tracking of applicant documentation. This is the list that was provided to the auditor.

Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers and Mainstream Vouchers programs and will implement internal control procedures that will ensure compliance with federal regulations. Michael McDougle, HCV Manager, will be responsible to implement this corrective action by June 30, 2024. CMHA has been working diligently over the past IO months to implement this corrective action with the current two CMHA employee inspectors that are following up on the life and safety 24 hour inspections and also the 30 day follow ups. When landlords have informed CMHA that they are unable to find contractors to complement the maintenance failed items, CMHA is making a note on the inspection forms and tenant file as landlords inform CM HA that they are in need of additional time. The inspection reports under this audit were completed by the contractor, Inspection Group and have since then been corrected. To date, all of the failed inspections have been reinspected and passed.

Views of responsible officials and planned corrective action: The Authority has recognized the material weakness in the Section 8 Housing Choice Vouchers and Mainstream Voucher programs and will implement internal control procedures that will ensure compliance with federal regulations. Michael McDougle, HCV Manager, will be responsible to implement this corrective action by June 30, 2024. CMHA has been working diligently over the past IO months to correct the inspection process that was not completed by the contracted inspectors through Inspection Group. Tenants were under the impression that they were not required to have inspections if someone was sick in their household, as previously waived during the pandemic. The HCV tenants have since been informed with each month's recertification mailing that they are required under HUD regulations to have an annual inspection. CMHA has also trained and assigned two HCV staff to become inspectors and have a process in place where one employee completes the annual inspections and the other employee follows up on the reinspection as needed. If inspections are not completed by time of recertification, the HAP payment is held. To date, annual inspections have been completed by CMHA staff.

RHA started using Affordable Housing to provide Rent Reasonableness reports. In addition, once the HCV program started to be managed by NHA, they use Rent O Meter to provide Rent Reasonableness Reports and NHA staff will enter those numbers into PHA web to maintain as a part of the annual renewal process or when a rent increase is requested by the landlord. In addition, a checklist was developed to make sure that all items are collected as necessary and entered into the PHA web system (housing management system).

The housing authority had instances of income, asset or medical miscalculation or insufficient verification and (1) instance of incorrect payment standard. Rockport Housing Authority (RHA) contracted with Newburyport Housing Authority (NHA) to manage the Section 8 program. They will be calculating income, assets and/or medical expenses based on HUD regulation. NHA is staffed with an experienced Section 8 Coordinator. In addition, NHA uses Rent O Meter to provide Rent Reasonableness Reporting that will then be entered into PHA web as a method of record .

The Authority will catalog and maintain all required tenant file documents in accordance with federal requirements and the Authority’s internal policies. Michael Simelton, Executive Director, has assumed the responsibility of executing strengthened controls over tenant file documentation maintenance as of April 30, 2024.

2023-002 ALN 14.871 – Section 8 Housing Choice Vouchers Program – Eligibility The Executive Director acknowledges the finding and is following the auditor's recommendation as listed in the Schedule of Findings and Responses. Person Responsible for Correction of Finding: N. Lee Staton, Executive Director Projected Completion Date: June 30, 2024

BHA Audit Finding Response: Finding reviewed with program specialist and manager with following action plan in place to ensure key EIV reports are run on a scheduled basis and appropriate actions are taken; Policies and procedures surrounding EIV reviewed. Program specialist implemented the use of "tickler" reminders on outlook calendar to prompt EIV reports within 90 days for new move-ins. The manager will monitor monthly and quarterly to ensure EIV report is run for all move-ins and recertifications.