Corrective Action Plans

Finding 2023-002 – Housing Choice Voucher Program – Internal Control over Waiting List – Noncompliance and Material Weakness - Housing Choice Voucher Program - subsidy ALN #14.871 Corrective Action Plan: Finding 2023-002 correctly identifies the same underlying cause (recruiting and retaining qualified staff) as well as alluding to another underlying problem—antiquated software and IT systems—as contributing factors. Our detailed analysis of the issues giving rise to Finding 2023-001 and the strategic and comprehensive remedies being pursued will result in better outcomes in implementing RHA’s waiting list policies and procedures. For example, a new eligibility unit under an eligibility manager, will bring focus to sound waiting list management. However, another critical underlying cause is the system of waiting list preferences and having a waiting list that remains open regardless of the size. RHA proposes to do away with all preferences except that of giving higher priority to residents of Wake County and those who are employed in Wake County. An applicant’s preference can change multiple times while they are on the waiting list. Anytime one applicant provides new information that changes their preferences and position on the waiting list, the waiting list changes. Greatly simplifying RHA’s waiting list by eliminating most preferences will result in a more manageable waiting list going forward. An additional remedy RHA has implemented is closing the HCV waiting list for the first time in its history. This will greatly reduce the administrative burden of adding new applicants on a continual basis and then annually updating (purging) an unnecessarily large waiting list. Staff in the eligibility unit will have more time to focus on better management of the waiting list. These additional changes in RHA’s program management will complement the other changes discussed under Funding 2023-001. Person Responsible: HCV Director Priscilla Batts and her Eligibility Manager Anticipated Completion Date: The system of closing and opening waiting lists based on the adequacy of the size of the waiting list has been implemented on October 1, 2023. It is anticipated that the list will reopen on April 1, 2024, RHA’s go-live date for the new software. The elimination of most preferences will be implemented at the same time—April 1, 2024.

Finding 2023-001 – Housing Choice Voucher Program Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Material Weakness - Housing Choice Voucher Program - subsidy ALN #14.871 Corrective Action Plan: Finding 2023-001 for the most part correctly identifies the cause of this finding: “We noted that the Authority has experienced difficulty in hiring, training, and retaining quality staff. This is the cause for each of the instances of noncompliance referenced.” The “Great Resignation” during the pandemic affected the HCV Program significantly as staff began to search for other opportunities and potential staff did not find RHA’s compensation competitive. Other negative impacts related to the pandemic included the moratorium on evictions and termination of assistance. Participants had fewer incentives to comply and became lax, resulting in increased levels of work to counter this lax attitude towards program rules. Later in 2022, the end of moratoria resulted in RHA’s voucher utilization rates plummeting as landlords exercised their rights to evict and terminate as well as pursuing rapidly increased market rents instead of renewing leases of voucher participants or renting to voucher holders for the first time. The efforts to retain landlords and issue hundreds of vouchers strained the departments’ staffing resources. The underlying cause of the findings was not just the pandemic effects. RHA recognized that it had underinvested in program operations. First, compensation levels were not close to being competitive. Second, RHA did not invest enough in staff training, a key factor in retention. Third, RHA had also underinvested in technology, using inefficient systems and paper-intensive operations. Fourth, in addition to underinvesting in compensation, RHA also did not allocate resources to staffing, resulting in an understaffed department—managers and line staff. And fifth, these areas of underinvestment led to an organizational structure and staffing model that resulted in staff roles being very narrow. Multiple staff were involved in individual aspects of processes like annual recertifications. It did not require much training, and it relied on staff to do narrow repetitive tasks in a conveyor-belt fashion without anyone being accountable for an entire process. For example, between one and two staff were responsible for doing calculations for participants’ rent portion and subsidy amounts for 3,800 or so annual recertifications and scores of interim recertifications. Four “client specialists” were each responsible for facilitating almost 1,000 participants’ compliance with recertification requirements prior to the two account specialists’ calculation work. In 2023, RHA started to address the root cause that led to this and other findings—underinvestment: 1. RHA’s Human Resources issued an RFP for a firm to do an analysis of compensation levels and make recommendations for classification of positions and competitive compensation. The study was completed and implemented effective the first pay period in December 2023. Individual compensation increases averaged more 10 percent, with staff in the operating departments like HCV benefiting from even higher salaries. These increases were on top of a five percent increase in all salaries effective July 1, 2023, in anticipation of the results of the study. 2. The Director of HCV immediately, upon direction to increase training, contracted with Nan McKay to provide HCV Specialist Certification training to all staff responsible for any part of the eligibility and ongoing occupancy processes. Prior to this effort, only one HCV staff member had been certified. All but one staff person failed the certification class. Going forward, all new staff will be required to pass Nan McKay’s HCV Specialist Certification class by the end of probation. 3. The HCV Director also contracted for Manager and Supervisor Training by Nan McKay for all supervisory staff. All completed certification requirements. 4. The HCV Director also recommended and implemented proposals to reorganize the department by ensuring that managers had a manageable supervisory load of not more than six staff per manager. The new structure created an eligibility unit headed by an eligibility manager (for the first time) as well as two units of ongoing eligibility staff of 12 HCV specialists overseen by two managers. These actions represent a significant increase in staffing and supervision. This reorganization also entails the implementation of a “case management” model in which each HCV Specialist is responsible and accountable for an initial case load of 300 voucher participants. Managers will be responsible for mentoring, training, quality control (file audits) and evaluation of the work of their staff. This reorganization of the department reflects multiple strategies to address some of the root causes that gave rise to the audit finding. 5. By the time the new CEO came on board on April 17, 2023, RHA had completed the evaluation of bids for new software and selected YARDI’s Voyager, Rent Café portals, and other applications to replace antiquated systems. Contract negotiations between RHA and YARDI were completed in July 2023. This initiative represented both a commitment to far greater efficiency and accuracy as well as a willingness to invest in program operations. Implementation and setup are well underway and April 1, 2024, is the “go-live” date. Needless to say, this commitment of resources and countless hours of staff time over nine months has had short-term impacts on RHA’s ability to address identified weaknesses. However, RHA is committed to long-term benefits while enduring short-term pain. These investments in a comprehensive strategic plan for long-term improvements in customer service, compliance, and performance will yield positive results without necessarily making major progress over the short term. To effect improvements over the short term, RHA has implemented the following measures: 1. The HCV director contracted with Nan McKay to assist RHA with catching up on compliance work that has stalled as a result of short staffing and lack of trained staff. Nan McKay’s own difficutly in retaining trained staff and hiring and training new staff delayed their assistance. This delay was further exacerbated by cyber event at the beginning of May 2023. RHA’s computers and systems were locked down by a threat actor requiring ransom. This event reduces RHA operations to manual processes and lack of access to key information to perform compliance work.Nan McKay’s efforts to assist are increasing over time. 2. HCV managers are increasing their efforts to perform qualify control efforts, focusing their staff’s attention on enforcing participants’ compliance with program requirements, including deadlines, and using what they learned from their training. Person Responsible: Priscilla Batts, HCV Director, is principally responsible and accountable for focusing her team on the strategic initiatives outlined above. Anticipated Completion Date: Some of the corrective actions above have been implemented, for example, competitive compensation, training, and outsourcing some of the compliance work. However, these are mainly system changes that will be fully implemented in 2024, for example, new software, with significant improvements that will be evidenced by December 31, 2024.

Finding 2023-003 – Low-Income Public Housing Tenant Files – Eligibility – Internal Control over Tenant Files – Noncompliance and Significant Deficiency Corrective Action Plan: The underlying causes of Finding 2023-03 include many, if not all, the causes underlying Finding 2023-01: 1. Pandemic effects on staffing and resident habits. 2. Underinvestment in staff compensation. 3. Underinvestment in training. 4. Underinvestment in adequate staffing levels. 5. An organizational structure that diffuses accountability for compliance, including timeliness of annual recertifications. In the Housing Management Department, all rent calculations are centralized and completed by one Central Office employee. A management system that does not hold property managers accountable for compliance and relies on one employee doing rent calculations for over 1,200 residents is likely to result in lack of compliance when other negative factors (1 to 5) come into play. RHA’s action plan includes: • Competitive compensation to attract and retain qualified staff. • Increasing senior management staff so that portfolio managers will have manageable supervisory loads of no more than five property manager each. • Reorganizing property staffing by upgrading office assistants to Housing Management Specialists, who will perform all recertication tasks, reviewed by their managers. • All Housing Management Specialists will receive certification training on rent calculation as well as property manager certification for high-performing staff who will become eligible for promotion. • Sites with complex social and other problems will have dedicated property managers, instead of splitting managers between sites. • New state-of-the-art software will greatly improve efficiency in communications with residents, paperless processes, and allow managers and their staff to gauge their performance, including timeliness on an ongoing basis. More qualified and talented property managers, supervised, mentored, and held accountable by portfolio managers, as well as supported by trained and higher qualified housing management specialists will work as a team to ensure compliance, including timely completion of recertications. Person Responsible: Sonia Anderson Director of Housing Management, portfolio managers, and property managers. Anticipated Completion Date: Implementation of all remedies will be completed by June 30, 2024.

Finding 2023-001: At March 31, 2023, the Corporation's residual receipts account was not invested in an interest bearing account. Comments on the Finding and Each Recommendation: The Agent should transfer the residual receipts account to an interest bearing account. Action(s) taken or planned on the finding: Agreed. The Agent concurs with the finding and the auditor's recommendation. The Corporation transferred the residual receipts account to an interest bearing account on October 31, 2023.

Name of auditee: Friendship Manor Housing Development Fund Company, Inc. Project No.: 01411252 TIN: 20-8665840 Name of audit firm: EFPR Group, CPA, PLLC Period covered by audit: March 31, 2023 CAP prepared by: Andrea D. Mays President of the Managing Agent ADM Management Group, Inc. (716) 892-1799 Current Findings on the Schedule of Findings and Questioned Costs and Recommendations (1) Finding 2023-001 Management understands HUD's requirements for depositing surplus cash into the residual receipts account and will deposit the delinquent deposit of $7,133 into the residual receipts by March 31, 2024.

Recommendation: We recommend that the Authority reviews its internal controls over review of annual income calculations to ensure compliance with eligibility requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Huntsville Housing Authority (HHA) is restructuring the Public Housing Department to add additional management positions and implement comprehensive standards and operating procedures. These procedures will include clearly defined eligibility processes and enhance quality control measures. Management will conduct oversight of key functions, data entry, and maintain a consistent review of regulatory compliance. Management will complete more targeted and a higher number of quality control audits. Additionally, HHA will increase staff training on key public housing operation functions. HHA is committed to ensure that all employees have proper training in all components of the Public Housing program. Name(s) of the contact person(s) responsible for corrective action: Turkessa Coleman Lacey, Deputy Executive Director Planned completion date for corrective action plan: As of December 15, 2023 the correction action plan is complete and on-going.

Name of Auditee: Poughkeepsie Housing Authority Name of Audit Firm: EFPR Group, CPAs, PLLC Period Covered by the Audit: March 31, 2023 CAP Prepared by: Thomas Shanley, Accountant Phone: (845) 485-8931 (A) Current Finding on the Schedule of Findings and Questioned Costs and Recommendations (2) Finding 2023-002 (a) Comments on the Findings and Recommendations - The Authority agrees with the finding. The Authority also agrees with the recommendation. Please see below for additional comments and action taken. (b) Action Taken - The Authority also agrees with the recommendation and will review all compliance requirements and HUD notifications for all new funding sources. (c) Planned Implementation Date - The Authority expects to complete the corrective action by March 31, 2024.

Actions Taken or Planned - Auditee agrees with this finding. Our policy has been to make surplus cash deposits after the final audit has been issued. Management has determined that making the required deposit will leave the entity with low funds to cover operation expenses. Management is currently in communication with HUD discussing options of a possible waiver for the required deposit or the possibility of making the deposit with promise of approval for immediate release

Actions Taken or Planned - Auditee agrees with this finding. Our policy has been to make surplus cash deposits after the final audit has been issued. Management has determined that making the required deposit will leave the entity with low funds to cover operation expenses. Management is currently in communication with HUD discussing options of a possible waiver for the required deposit or the possibility of making the deposit with promise of approval for immediate release

Finding 2023-001: Delay in submitting the unaudited FDS to HUD Corrective Action Plan: Management has hired a new qualified staff member to fill the gap left by the previous critical employee at the time of financial closing. Management will continue to closely monitor and review financial transaction recordings in a timely manner making sure the data is accurate and complete. Management will continue reviewing, comparing, and reconciling the financial data that will be used as an input for the FDS reporting. Name of Responsible Person: Worku Alem, Director of Finance Projected Completion Date: March 31, 2024

Pupil Services and Attendance will continue to provide policy guidance on the LAUSD student withdrawal procedures through the following methods: 1. Pupil Services will maintain policies pertaining to attendance, enrollment, and withdrawals up to date. 2. Pupil Services published the Bulletin 4926.3 Enrollment, Attendance, and Withdrawal Policies and Procedures dated July 31, 2023, and is available for all LAUSD staff in the LAUSD E-Library. 3. Pupil Services has created a SharePoint available to all LAUSD staff employee where we have made available the Enrollment, Attendance, and Withdrawal Policies and Procedures Manual. This Manual outlines the LAUSD withdrawal policy and procedures for both elementary and secondary students along with the supporting documents necessary such as the Withdrawal Types and Reasons. This manual is also hyperlinked directly on Bulletin 4926.3 Enrollment, Attendance, and Withdrawal Policies and Procedures which is available for all LAUSD staff in the LAUSD E-Library. 4. Explore possible document validation for withdrawal reasons in the MiSiS Withdrawal Screen. 5. Pupil Services will provide training to the A-G Counselors on the Withdrawal Process and Procedures yearly by March 2024. 6. Pupil Services will provide training to the LAUSD Data team on accurate withdrawal procedures by December 2023. 7. Pupil Services will continue to offer training to the Pupil Services Lead Counselors through the informational sessions offered every other month. 8. Pupil Services will conduct a training on Withdrawal Process and Procedures to LAUSD Office personnel yearly by December 2023. 9. Pupil Services will continue provide ongoing reminders every other month through the Schoology communication platform regarding accurate enrollment, withdrawal procedures and the MYPLN Essential Tips training to support with the withdrawal process, codes, and documentation. 10. Pupil Services and Attendance will communicate with Region Administration on disseminating information to school-site designees with audit findings to participate in the MYPLN training on accurate enrollment and withdrawal codes during school year 2023-24. 11. Will obtain written acknowledgement for completion of the MYPLN Essential Tips training to support with the withdrawal process, codes, and documentation from the schools identified with audit findings by March 2024. Name: Elsy Rosado Title: Director, Pupil Services and Attendance Telephone: (213) 241-3844

Finding 2023-004 - Tenant File Review Auditee's Response and Planned Corrective Action The Authority will establish a checklist covering all compliance requirements for tenants for the Tenant Housing Representatives to use during the recertification process which will be signed by the Tenant Housing Representative and maintained in the tenant's file. Planned Implementation Date of Corrective Action: December 31, 2023 Person Responsible for Corrective Action: Mike Cruz, Executive Director Long Beach Housing Authority

2023-002 Condition: Questionable Use of Federal Funds Steps to Resolve: We concur with this finding and the Auditor's recommendation. We will establish internal financial control procedures over the budget process to ensure that each program operates within its means and in accordance with HUD regulations. We have already taken steps to reduce expenses in the COCC and will generate revenue from grants and other business activity to offset the COCC expenses. Management will take corrective action to close this finding in connection with the FY 2024 audit report. Timeframe: By the fiscal year end for March 31, 2024 Individual responsible for correction: Mr. Ahmad Taylor, Executive Director

2023-001 Condition: Deficiencies Noted in Examination of Housing Choice Voucher Program Participant Files Steps to Resolve: We concur with this finding and the Auditor’s recommendation. We will review the internal control procedures over tenant file re-certifications and documents. Management will implement procedures to clear this finding in FY 2024 Timeframe: By the fiscal year end for March 31, 2024 Individual responsible for correction: Mr. Ahmad Taylor, Executive Director

Management agrees with the finding. The financial statements were submitted to HUD on October 5, 2022.

Management agrees with the finding. The financial statements were submitted to HUD on October 3, 2022.

Management agrees with the finding. The financial statements were submitted to HUD on October 3, 2022.

2023-001, 2022-001 Condition: For the year ended June 30, 2022, deposits totaling $8,522 were required but not made into the replacement reserve. Those deposits have not yet been made into the replacement reserve. Recommendation: Management should continue to request rent increases from HUD and deposit delinquent deposits into the replacement reserve when they are able. Corrective Action Planned. We have requested that HUD approve a draw from the replacement reserve for repairs exceeding $8,522. Completion date for corrective action: June 30, 2024 Contact person: Deb Percy, Chief Financial Officer

Enhance the internal control procedures for the Community Development Block Grant Program to specifically state the requirement for the PR29 Cash on Hand Quarterly Report to be submitted no later than 30 days following each completed quarter and communicate this requirement to the City's finance department employees and Senior Community Development Specialist. Doing so ensures the responsible parties are informed of the requirement and expands the number of responsible parties who are cognizant of and monitoring to ensure this action is completed on time. Additionally, the finance department employees and Senior Community Development Specialist have been advised of the importance of meeting this requirement.

2023-001 Condition: Deficiencies Noted in SEMAP Compliance Steps to Resolve: We concur with this finding and the Auditor’s recommendation. We will adjust our procedures to ensure that all new leases and rent increases have a determination of rent reasonableness and the documentation is retained in the files for review. Management will implement procedures to clear this finding in FY 2024. Timeframe: By the fiscal year end for March 31, 2024 Individual responsible for correction: Ms. Teresa Pope, Executive Director

Finding 2023-002 Reporting – Late REAC Submission 14.155 Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects 14.195 Section 8 Housing Assistance Payments Program Material Weakness in Internal Control – Material Noncompliance Condition: The Organization’s annual financial statement data was not submitted within the timeframes specified by HUD. The financial statement data was due by September 30, 2023, but was not filed until December 21, 2023. Auditor’s Recommendation: We recommend that the Organization make every effort to submit its annual financial statement data within the timeframe specified by HUD. Action Taken: The Organization has maintained contact with HUD and prioritized submitting the annual financial statement data after they were informed it was late. Effective Date: December 21, 2023 Contact Information: Kristy Hust, Director of Operations Northside Mental Health Center, Inc. Management Agent 12512 Bruce B Downs Blvd Tampa, FL 33612 (813) 977-8700

Management has implemented, and is in the process of implementing, specific corrective actions to address each of HUD’s Findings. The Authority’s Deputy Director, Kenneth Clark has assumed the responsibility of implementing the specific corrective actions and anticipates complete implementation by March 31, 2024.

2023-001 Segregation of Duties; District management is cognizant of their internal control structure and continues to evaluate cost effective opportunities to further improve segregation of duties. In addition, they will continue to closely monitor the financial operations of the District.

PHA establish policies and procedures to ensure that all tenant files contain all sources of income.

PHA establish policies and procedures to ensure that all tenant files contain independent verification of income.