Corrective Action Plans

Finding 1225593 (2025-006)

Material Weakness 2025

NJ

HUD Housing Programs Special Tests & Provisions

Authority's Response and Planned Corrective Action Plan: The Authority agrees with the finding and will implement procedures to perform and document annual utility allowance reviews in accordance with HUD requirements and maintain supporting documentation for future reviews. Tyler Martin, Executive ...

Authority's Response and Planned Corrective Action Plan: The Authority agrees with the finding and will implement procedures to perform and document annual utility allowance reviews in accordance with HUD requirements and maintain supporting documentation for future reviews. Tyler Martin, Executive Director, is responsible for ensuring the deficiencies have been rectified by June 30, 2026.

View Audit 408466

Finding 1225592 (2025-005)

Material Weakness 2025

Princeton Housing Authority

NJ

HUD Housing Programs Questioned Costs Special Tests & Provisions

Authority's Response and Planned Corrective Action Plan: The Authority has recognized the material weakness in the Project Based Rental Assistance program and will implement internal control procedures that will ensure compliance with federal regulations. Tyler Martin, Executive Director, is respons...

Authority's Response and Planned Corrective Action Plan: The Authority has recognized the material weakness in the Project Based Rental Assistance program and will implement internal control procedures that will ensure compliance with federal regulations. Tyler Martin, Executive Director, is responsible for ensuring the deficiencies have been rectified by June 30, 2026.

View Audit 408466

Finding 1225591 (2025-004)

Material Weakness 2025

Princeton Housing Authority

NJ

HUD Housing Programs

Authority's Response and Planned Corrective Action Plan: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Project Based Rental Assistance program to ensure that established internal control policies are being followed on a timely basis. Tyler Mart...

Authority's Response and Planned Corrective Action Plan: The Authority accepts the recommendation of the auditor. The Authority will increase oversight in the Project Based Rental Assistance program to ensure that established internal control policies are being followed on a timely basis. Tyler Martin, Executive Director, is responsible for ensuring the deficiencies have been rectified by June 30, 2026.

View Audit 408466

Finding 1225540 (2025-002)

Material Weakness 2025

Liberty Georgian Arms Housing Development Fund Company, Inc.

NY

HUD Housing Programs

Finding #2025-002 Current Year Audit Submission to REAC was late: Recommendation: We recommend that management implement procedures to ensure that audit material is provided to the auditor in a timely manner to produce the audit for the REAC submission within 90-days. Action taken: Georgian Arms Apa...

Finding #2025-002 Current Year Audit Submission to REAC was late: Recommendation: We recommend that management implement procedures to ensure that audit material is provided to the auditor in a timely manner to produce the audit for the REAC submission within 90-days. Action taken: Georgian Arms Apartments agrees with the auditor’s recommendations and will implement procedures to ensure timely filing in the future. For questions regarding this corrective action plan, please contact Dawn Olmstead, VP – Director of Asset Management, at (315) 337-1401.

View Audit 408420

Finding 1225511 (2025-002)

Material Weakness 2025

Su Casa Community Housing Association

CA

Eligibility Subrecipient Monitoring Cash Management

Finding 2025-002 – Personal Expenses Charged To The Project Recommendation: Management should strengthen expense and invoice review and approval procedures to ensure that all costs charged to the Project are reasonable, necessary, and directly related to Project operations, in accordance with the HU...

Finding 2025-002 – Personal Expenses Charged To The Project Recommendation: Management should strengthen expense and invoice review and approval procedures to ensure that all costs charged to the Project are reasonable, necessary, and directly related to Project operations, in accordance with the HUD Regulatory Agreement. Expense reimbursements should require detailed supporting documentation clearly demonstrating a valid Project purpose. A formal certification should be implemented as part of the approval process to attest that expenses are not personal in nature and have been approved. Internal reviews of Project expenses should be performed to identify and promptly correct any ineligible charges, including reimbursement to the Project where necessary. View of Responsible Officials and Planned Corrective Action: The individuals involved in the issues identified during the audit are no longer associated with the Project. Specifically, the former resident property manager is no longer employed by the Corporation and the composition of the Board has changed since the period under review. Management believes the identified issues resulted from a breakdown in adherence to existing approval, oversight and monitoring controls, including collusion among individuals responsible for reviewing and approving expenditures. The Project’s established policies and procedures were not properly followed. With the turnover in key personnel and Board leadership, management expects improved compliance with existing controls and oversight responsibilities. Management and the Board will continue to monitor Project expenses and ensure that expenditures are reviewed and approved in accordance with Project requirements and fiduciary responsibilities. Management response: Management agrees with the recommendation. Action Taken: The individuals involved in the issues identified during the audit are no longer associated with the Project. Specifically, the former resident property manager is no longer employed by the Corporation, and the composition of the Board has changed since the period under review. Management believes the identified issues resulted from a breakdown in adherence to existing approval, oversight, and monitoring controls, including collusion among individuals responsible for reviewing and approving expenditures. The Project's established policies and procedures were not properly followed. with the turnover in key personnel and Board Leadership, management expects improved compliance with existing controls and oversight responsibilities. Management and the Board will continue to monitor Project expenses and ensure that expenditures are reviewed and approved in accordance with Project requirements and fiduciary responsibilities.

View Audit 408391

Finding 1225510 (2025-001)

Material Weakness 2025

Su Casa Community Housing Association

CA

Subrecipient Monitoring HUD Housing Programs Reporting

Finding 2025-001 – Improper approval of invoices Recommendation: We recommend that management should enhance invoice review and approval procedures to ensure that expenses are recorded in the period in which the related services are performed, in accordance with U.S. GAAP and HUD requirements. Appro...

Finding 2025-001 – Improper approval of invoices Recommendation: We recommend that management should enhance invoice review and approval procedures to ensure that expenses are recorded in the period in which the related services are performed, in accordance with U.S. GAAP and HUD requirements. Approval of invoices should require verification of service dates and services performed prior to recording the expense in the general ledger. Cutoff procedures should be formalized at year-end to identify and accrue expenses for services received but not yet invoiced or approved. Supervisory reviews of expense coding and timing should be performed to confirm compliance with both financial reporting and HUD. View of Responsible Officials and Planned Corrective Action: The previous management company has been replaced with a new management company. The new management company provides complete transparency and reports directly to the Board. Existing invoice review, approval and monitoring procedures are now being consistently followed and enforced to ensure that expenses are properly reviewed and recorded in the appropriate accounting period. In addition, purchasing and payment transactions are subject to multiple levels of approval and oversight to help ensure compliance with established policies, proper authorization of expenditures and accurate financial reporting. Management response: Management agrees with the recommendation. Action Taken: The previous management company has been replaced with a new management company. The new management company provides complete transparency and reports directly to the Board. Existing invoice review, approval, and monitoring procedures are now being consistently followed and enforced to ensure that expenses are properly reviewed, approved, and recorded in the appropriate accounting period. In addition, purchasing and payment transactions are subject to multiple levels of approval and oversight to help ensure compliance with established policies, proper authorization of expenditures, and accurate financial reporting.

View Audit 408391

Finding 1225270 (2025-005)

Material Weakness 2025

Henry C. Nevins Home, Inc.

MA

HUD Housing Programs Internal Control / Segregation of Duties Special Tests & Provisions

Federal Award Finding 2025-005 - Material Weakness, Material Non-Compliance - Special Tests and Provisions, Surplus Cash and Distributions to Owners or Affiliates Finding: During the fiscal year ended December 31, 2025, project management did not prepare or document a surplus cash calculation in acc...

Federal Award Finding 2025-005 - Material Weakness, Material Non-Compliance - Special Tests and Provisions, Surplus Cash and Distributions to Owners or Affiliates Finding: During the fiscal year ended December 31, 2025, project management did not prepare or document a surplus cash calculation in accordance with HUD requirements, nor did management implement controls to review, approve, or retain documentation supporting the required calculation. Recommendation: Management should establish and implement formal policies and procedures to ensure that surplus cash is independently calculated in accordance with HUD requirements and the applicable HUD Regulatory Agreement. Such procedures should include preparation of a documented surplus cash calculation at each required reporting period using HUD-prescribed criteria; Independent review and approval of the surplus cash calculation by appropriate management personnel or, where applicable, the court-appointed receiver; and retention of supporting documentation sufficient to demonstrate compliance with HUD restrictions on the use and distribution of project funds. Management should coordinate with the court-appointed receiver and HUD to ensure that surplus cash determinations are performed consistently and in compliance with program requirements going forward. Action Taken: Management acknowledges the finding related to the absence of an independently prepared and documented surplus cash calculation. During the fiscal year ended December 31, 2025, the Organization operated in an environment of financial distress, limited staffing resources, and evolving oversight responsibilities, which contributed to informal and undocumented procedures related to surplus cash determinations. As disclosed in the financial statements, the Organization became subject to a court-appointed receivership. Following the appointment of the receiver, responsibility for financial oversight, including compliance with HUD cash flow and surplus cash requirements, has transitioned to the receiver in coordination with HUD. The receiver and management are evaluating HUD requirements related to surplus cash calculation. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: Not started

View Audit 408309

Finding 1225268 (2025-004)

Material Weakness 2025

Henry C. Nevins Home, Inc.

MA

HUD Housing Programs Questioned Costs Special Tests & Provisions

Federal Award Finding 2025-004 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Cash Receipts Finding: The Organization maintained cash balances in excess of federally insured limits in financial institutions that did not meet HUD's minimum GNMA rating requirements. Recomm...

Federal Award Finding 2025-004 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Cash Receipts Finding: The Organization maintained cash balances in excess of federally insured limits in financial institutions that did not meet HUD's minimum GNMA rating requirements. Recommendation: The Organization should transfer excess cash balances to financial institutions that meet HUD's GNMA rating requirements or otherwise structure its cash holdings to ensure compliance with federal insurance limits and HUD custodial requirements. Action Taken: Nevins moved to this financial institution with the first HUD loan in 2015. This is a local bank that actively supports Nevin's mission in the community. Given Nevins’ current financial struggles, the balance in the bank seldom exceeds the $250,000 threshold. In addition, the receiver established its own account with East West Bank and was in the process of fully transitioning the operating account to East West Bank at the end of the fiscal year. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: Not started

View Audit 408309

Finding 1225266 (2025-003)

Material Weakness 2025

Henry C. Nevins Home, Inc.

MA

HUD Housing Programs Questioned Costs Special Tests & Provisions

Federal Award Finding 2025-003 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Reserve Fund, Equipment Replacement Reserve Fund, and Special Escrows Finding: During the audit period, Henry C. Nevins Home, Inc. did not make all required deposits into the reserve f...

Federal Award Finding 2025-003 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Reserve Fund, Equipment Replacement Reserve Fund, and Special Escrows Finding: During the audit period, Henry C. Nevins Home, Inc. did not make all required deposits into the reserve for replacement fund in accordance with the terms of the applicable HUD Regulatory Agreement. The required monthly reserve deposits were either not made or were made in amounts less than those required. Recommendation: We recommend that Henry C. Nevins Home, Inc., in coordination with the court-appointed receiver and HUD, establish procedures to ensure that reserve for replacement deposits are made timely and in accordance with the HUD Regulatory Agreement, or that appropriate waivers or modifications are obtained from HUD where compliance is not currently feasible. Action Taken: Management acknowledges the audit finding related to the failure to make required deposits into the reserve for replacement fund in accordance with the HUD Regulatory Agreement. As disclosed in the notes to the financial statements, during the audit period the Organization was subject to a court-appointed receivership effective September 12, 2025 and is in default under its HUD-insured mortgages. As part of the receivership, control over substantially all cash management and financial decision-making activities was assumed by the court-appointed receiver. Management believes that the conditions giving rise to this finding are directly related to liquidity constraints. Given the complexities of the receivership and regulatory environment, a specific timeline for remediation is not able to be determined. As a result of the loan default, the mortgage was assigned to the U.S. Department of Housing and Urban Development. Since the appointment of the Receiver, responsibility for cash management, financial oversight, and debt service planning has transitioned to the Receiver. The Receiver and the Organization are actively evaluating available options to address the loan default which includes marketing the Organization for a sale. Interim corrective actions include enhanced cashflow monitoring, prioritization of expenses required to continue operations, and ongoing communication with HUD regarding the sale process. Management believes that these actions will address the conditions identified and result in the satisfaction of the HUD loan. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: In process

View Audit 408309

Finding 1225265 (2025-002)

Material Weakness 2025

Henry C. Nevins Home, Inc.

MA

HUD Housing Programs Questioned Costs Special Tests & Provisions

Federal Award Finding 2025-002 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Status and Reserve for Replacements Finding: During the fiscal year, the Organization experienced ongoing financial distress and declining liquidity, which adversely affected its abili...

Federal Award Finding 2025-002 - Material Weakness, Material Noncompliance - Special Tests and Provisions, Mortgage Status and Reserve for Replacements Finding: During the fiscal year, the Organization experienced ongoing financial distress and declining liquidity, which adversely affected its ability to meet financial obligations as they became due. As a result, mortgage payments, including required principal, interest, mortgage insurance premiums, and escrow deposits, were not made in accordance with the loan and regulatory agreements. As of December 31, 2025, delinquent amounts totaled approximately $978 thousand. Recommendation: The Receiver and the Organization should work with HUD to develop and implement a formal workout or resolution plan, including enhanced cash-flow monitoring and debt service planning, to address the loan default and restore compliance with HUD debt service requirements. Action Taken: Management acknowledges the finding related to the failure to make required debt service payments under the HUD Section 232 and Section 241(a) insured mortgage loan agreements. The Organization experienced significant financial distress and constrained liquidity during the fiscal year, which limited its ability to remit required principal, interest, mortgage insurance premium, and escrow payments as they became due. As a result of the loan default, the mortgage was assigned to the U.S. Department of Housing and Urban Development. With the appointment of a Receiver over the Organization, responsibility for cash management, financial oversight, and debt service planning has transitioned to the Receiver. The Receiver is marketing the facility towards a sale in order to satisfy the outstanding loan balance with HUD. Interim corrective actions include enhanced cash-flow monitoring, prioritization of operational suppliers, and ongoing communication with HUD regarding the project's financial condition and sale status. Management believes that these actions will support progress towards stabilization and marketability of the Organization. Responsible Person: Paul Valentine, Receiver Target Completion Date: September 30, 2026 Status: In process

View Audit 408309

Finding 1225235 (2025-001)

Material Weakness 2025

Housing Authority of Salt Lake City

UT

HUD Housing Programs

Action Taken: The Management of the Authority agrees with the findings; we will implement improved internal controls to ensure consistent compliance with regulatory requirements. We plan to continue to conduct file audits, standardize electronic document management procedures, expand use of Yardi co...

Action Taken: The Management of the Authority agrees with the findings; we will implement improved internal controls to ensure consistent compliance with regulatory requirements. We plan to continue to conduct file audits, standardize electronic document management procedures, expand use of Yardi compliance tools, and enhance quality control reviews. Strengthened compliance through revised checklists, increased file auditing, targeted staff training, expanded access to procedures and resources, enhanced supervisory oversight, and quarterly monitoring of utility allowance anomalies to improve consistency, accuracy, and adherence to HUD requirements. The HCV Director is the responsible party, and controls will be in place by the end of the December 31, 2026 fiscal year.

View Audit 408260

Finding 1225219 (2025-012)

Material Weakness 2025

Broward County Housing Authority

FL

HUD Housing Programs

Management does not concur. Documentation was provided and no further information was requested by auditors. Expected Implementation Date: None required. Contact Person: Housing Program Director

View Audit 408247

Finding 1225217 (2025-010)

Material Weakness 2025

Broward County Housing Authority

FL

HUD Housing Programs

Management does not concur. Documentation was provided during fieldwork. Expected Implementation Date: None required. Contact Person: Housing Program Director

View Audit 408247

Finding 1225215 (2025-008)

Material Weakness 2025

Broward County Housing Authority

FL

HUD Housing Programs

Planned Corrective Action: Management does not concur. Documentation or explanations were provided for all files tested. Expected Implementation Date: None required. Contact Person: Housing Inspector Supervisor

View Audit 408247

Finding 1225213 (2025-006)

Material Weakness 2025

Broward County Housing Authority

FL

HUD Housing Programs

Planned Corrective Action: Management does not concur and requests review of documentation provided during fieldwork. Expected Implementation Date: None required; pending auditor review. Contact Person: Housing Program Director

View Audit 408247

Finding 1225031 (2025-058)

Material Weakness 2025

State of Rhode Island

RI

Eligibility Questioned Costs Cash Management

Medicaid deployed a system enhancement to automatically run eligibility on CHIP individuals for whom TPL information was received from MMIS. This enhancement went live in May 2026. This enhancement will improve the accuracy of eligibility determinations for the Medicaid and CHIP populations. In July...

Medicaid deployed a system enhancement to automatically run eligibility on CHIP individuals for whom TPL information was received from MMIS. This enhancement went live in May 2026. This enhancement will improve the accuracy of eligibility determinations for the Medicaid and CHIP populations. In July 2024, federal partners operating the PARIS interstate match informed the State of a hold on PARIS interstate matching files. PARIS lifted the hold in October 2024. In November 2024, the State identified several defects in the PARIS results and suppressed requests for verification. A temporary system enhancement was logged to address the deficiencies and ensure the process was only requesting residency verification from individuals believed to be receiving Medicaid in another State. Long-term enhancements to the PARIS interstate match process are scheduled for late 2027. Anticipated Completion Date: Q4 2027 Contact Person: Anthony Salvo, Implementation Director of Policy and Programs, Executive Office of Health and Human Services Anthony.Salvo@ohhs.ri.gov

View Audit 408197

Finding 1224933 (2025-002)

Material Weakness 2025

Williamston Housing Authority

NC

Cash Management HUD Housing Programs Questioned Costs

Name of Contact Person: Michael Gaddy, Executive Director. Corrective Action: We will implement proper internal control procedures for the Public Housing Capital Fund. Management will establish procedures to obtain proper documentation to support all Public Housing Capital Fund expenses. Proposed Co...

Name of Contact Person: Michael Gaddy, Executive Director. Corrective Action: We will implement proper internal control procedures for the Public Housing Capital Fund. Management will establish procedures to obtain proper documentation to support all Public Housing Capital Fund expenses. Proposed Completion Date: Immediately.

View Audit 408192

Finding 1224932 (2025-003)

Material Weakness 2025

Williamston Housing Authority

NC

Eligibility HUD Housing Programs Reporting

Name of Contact Person: Michael Gaddy, Executive Director. Corrective Action: We will implement proper internal control procedures for the Public and Indian Housing program eligibility requirements. Management has established a checklist for applications and will establish a checklist for Move-ins a...

Name of Contact Person: Michael Gaddy, Executive Director. Corrective Action: We will implement proper internal control procedures for the Public and Indian Housing program eligibility requirements. Management has established a checklist for applications and will establish a checklist for Move-ins and Move-outs. Proposed completion date: Immediately.

View Audit 408192

Finding 1224931 (2025-001)

Material Weakness 2025

Williamston Housing Authority

NC

HUD Housing Programs

Name of Contact Person: Michael Gaddy, Executive Director. Corrective Action: Management will ensure that all records are provided timely in the future. Proposed Completion Date: Immediately.

View Audit 408192

Finding 1224913 (2025-001)

Material Weakness 2025

Lifewire

WA

Subrecipient Monitoring HUD Housing Programs Reporting § 200.303

Finding Number 2025-001 – Special Tests and Provisions (Rent Reasonableness) Corrective Action: What we've already been doing to correct the issue LifeWire has strengthened oversight within Services by consolidating the Services and Rapid Rehousing programs under a single Director, creating clearer ...

Finding Number 2025-001 – Special Tests and Provisions (Rent Reasonableness) Corrective Action: What we've already been doing to correct the issue LifeWire has strengthened oversight within Services by consolidating the Services and Rapid Rehousing programs under a single Director, creating clearer accountability and consistency in implementation. Additionally, we have expanded our approval workflow to include multiple levels of review: Advocate → Manager → Director → Finance. This structured, multi-tiered review process increases oversight and enhances our ability to identify and address issues related to rent reasonableness documentation prior to payment. As part of this enhanced workflow, we require that internal audit practices occur at each level of approval, ensuring that rent reasonableness and comparable unit analysis documentation is reviewed for completeness, accuracy, and timeliness — and that review and approval occur prior to tenant move-in — before advancing to the next stage. At each level, reviewers will audit a minimum of 5% of files or 5 files per month, whichever is greater. What else we are putting in place LifeWire will continue to provide comprehensive training for all Services staff, including advocates, managers, and directors, focused on rent reasonableness requirements and the timing of comparable unit analysis completion and review. The Services Director is responsible for delivering and overseeing this training. This training will address the specific requirements outlined in 24 CFR §578.49 and §578.51 and reinforce expectations that documentation is completed, reviewed, andapproved prior to tenant move-in. All staff will be required to formally acknowledge completion ofthe training and their understanding of the updated requirements. Responsible Staff: Olivia Montgomery •Advocates (initial preparation of rent reasonableness and comparable unit analysisdocumentation) •Services Managers (first-level supervisory review and approval prior to move-in) •Services Director (program oversight and secondary review) •Executive Director (internal audit of Services Director approvals) •Finance Director / Finance Department (final review, approval, and payment oversight) Anticipated Completion Date: Enhancements are currently in progress, with full implementation and demonstrated compliance expected by Q3 2026.

View Audit 408150

Finding 1224812 (2025-018)

Material Weakness 2025

City of Mission

TX

Reporting HUD Housing Programs Significant Deficiency

Corrective Action: The City will establish a centralized grant reporting calendar to monitor federal reporting deadlines; assign responsibility for the timely preparation and submission of required reports; and implement review procedures to ensure compliance with federal reporting requirements. Res...

Corrective Action: The City will establish a centralized grant reporting calendar to monitor federal reporting deadlines; assign responsibility for the timely preparation and submission of required reports; and implement review procedures to ensure compliance with federal reporting requirements. Responsible Individual(s): Michael Elizalde, Grants & Strategic Initiatives Director. Timeline: In Progress. Estimated September 2026.

View Audit 408033

Finding 1224569 (2025-005)

Material Weakness 2025

Housing Authority of the City of North Chicago

IL

Cash Management HUD Housing Programs

Corrective Action Plan: The NCHA has implemented enhanced financial management procedures to ensure the proper segregation of Public Housing and Housing Choice Voucher program funds and prevent the use of one program’s resources to support another program’s expenditures without appropriate authoriza...

Corrective Action Plan: The NCHA has implemented enhanced financial management procedures to ensure the proper segregation of Public Housing and Housing Choice Voucher program funds and prevent the use of one program’s resources to support another program’s expenditures without appropriate authorization, documentation, and accounting treatment. Interprogram transactions are now recorded through established due to/due from accounts and reconciled monthly to ensure accurate fund accountability. Financial policies and procedures have been updated to reinforce program-specific allowable uses of funds, and Finance staff have received training on HUD financial management requirements, fund segregation, and proper accounting practices. Ongoing monthly financial reviews by management will provide continued oversight and ensure compliance with HUD requirements. 1. Program Fund Segregation and Accounting Controls The NCHA has revised its accounting procedures to ensure that all program revenues and expenditures are recorded within the appropriate program fund and cost center. Public Housing Operating Funds will only be utilized for eligible Public Housing activities, and HCV program costs will be supported through HCV Administrative Fees, HCV reserves, or other allowable funding sources. Any transactions identified as requiring temporary interprogram support will be recorded through appropriate due to/due from accounts and will not be treated as program expenditures. Interprogram balances will be tracked separately from operating activity and monitored for timely repayment or resolution. 2. Review and Correction of Historical Transactions Finance staff has completed a review of interprogram transactions to identify instances where costs were charged to the incorrect program. Necessary accounting adjustments have been processed to properly allocate expenditure to the appropriate funding source. Going forward, all program cost allocations will be reviewed to confirm that expenses are:  Reasonable and allowable under applicable HUD requirements;  Charged of the appropriate program;  Supported by adequate documentation; and  Consistent with approved cost allocation methodologies. 3. Updated Financial Policies and Procedures The Authority has updated its financial procedures to reinforce:  Program-specific expenditure requirements;  Prohibited uses of Public Housing funds for HCV activities;  Proper recording of interprogram receivables and payables;  Required approval and documentation for interprogram transactions; and  Monthly reconciliation requirements. The updated procedures establish clear responsibilities for Finance staff, program managers, and supervisory personnel involved in financial review and approval processes. 4. Staff Training and Awareness Finance and program staff have received training regarding:  HUD program fund restrictions;  Public Housing Operating Fund eligible uses;  HCV Administrative Fee limitations;  Proper accounting treatment of interprogram activity; and  Documentation requirements under federal financial management standards. Additional training will be provided as needed to reinforce compliance and prevent recurrence. 5. Ongoing Monitoring and Quality Control The Finance Director will conduct monthly financial reviews to verify:  Public Housing and HCV funds remain properly segregated;  Due to/due from balances are accurately recorded and reconciled;  Program expenditures are charged to the appropriate funding source; and  Corrective actions remain effective. Management will review monthly financial reports, including program-level income statements, balance sheets, and interprogram activity reports, to identify and address potential compliance issues in a timely manner. As part of the corrective action, the NCHA executed an Agreement with BDO to provide financial management training, technical assistance, and workflow support related to HUD program accounting requirements, fund segregation, and proper recording of interprogram activity. BDO assisted Finance staff with strengthening accounting processes, including the development and implementation of standardized Yardi workflows to ensure program-specific coding, proper cost allocation, approval routing, and accurate financial reporting. Responsible Official: CFO, Sr. Staff Accountant with oversight by Executive Director Expected Completion Date: Implemented July 31, 2026; ongoing monitoring and reconciliation

View Audit 407829

Finding 1224568 (2025-004)

Material Weakness 2025

Housing Authority of the City of North Chicago

IL

HUD Housing Programs Matching / Level of Effort / Earmarking

Corrective Action Plan: The NCHA has implemented CFP drawdown procedures to ensure that all eLOCCS requests are supported by eligible expenditures, properly documented, and submitted in accordance with applicable federal cash management requirements and HUD Capital Fund Program regulations. Effectiv...

Corrective Action Plan: The NCHA has implemented CFP drawdown procedures to ensure that all eLOCCS requests are supported by eligible expenditures, properly documented, and submitted in accordance with applicable federal cash management requirements and HUD Capital Fund Program regulations. Effective immediately, the Authority has established the following corrective actions:  CFP Drawdown Review and Approval Process  All CFP drawdown requests are now reviewed by Finance staff before submission to verify that requested amounts are supported by eligible CFP expenditures, available obligations, and approved Capital Fund budgets.  A Management approval requirement has been implemented for all eLOCCS draw requests before submission.  Supporting documentation, including invoices, purchase orders, contracts, payroll allocations, and other eligible expenditure support, is maintained with each draw request.  Monthly eLOCCS-to-Expenditure Reconciliation  Finance staff perform a monthly reconciliation of CFP eLOCCS drawdowns to actual expenditures recorded in the accounting system.  The reconciliation process confirms that: o Drawdowns do not exceed eligible costs incurred; o Funds are properly recorded for the appropriate Capital Fund grant year and project; o Outstanding balances and remaining grant funds are accurately monitored; and o Any discrepancies are identified and corrected on time through appropriate accounting adjustments.  Improved Cash Management Controls  NCHA revised its CFP cash management procedures to align drawdown timing with actual cash needs and incurred eligible costs.  Draw requests are limited to amounts necessary to reimburse expenditures and avoid excessive cash balances.  Finance staff have been trained in federal cash management requirements, CFP eligible cost principles, and proper eLOCCS drawdown procedures.  Documentation and Record Retention  NCHA implemented a CFP Drawdown Checklist to document: o Grant availability; o Eligible expenditures supporting the draw; o Required approvals; o Reconciliation completion; and o Supporting documentation retention.  CFP financial records are maintained in accordance with federal record retention requirements and are available for HUD review.  Ongoing Monitoring and Quality Control  The CFO or designee conducts periodic quality control reviews of CFP drawdowns and related reconciliations to ensure continued compliance.  Any identified exceptions are documented, corrected, and incorporated into ongoing staff training and process improvements. Responsible Official: CFO, Sr. Staff Accountant with oversight by Executive Director/CEO Responsible for implementation, monitoring, and continued compliance with CFP drawdown procedures. Expected Completion Date: Implemented July 2026; Ongoing monitoring and monthly reconciliation procedures will continue as part of the Authority’s standard financial management practices

View Audit 407829

Finding 1224567 (2025-003)

Material Weakness 2025

Housing Authority of the City of North Chicago

IL

HUD Housing Programs

Corrective Action Plan: The NCHA has initiated a comprehensive audit of participant files and implemented standardized eligibility checklists integrated with Yardi workflows and aligned with HUD program requirements. Staff has received retraining on income calculation, third-party verification requi...

Corrective Action Plan: The NCHA has initiated a comprehensive audit of participant files and implemented standardized eligibility checklists integrated with Yardi workflows and aligned with HUD program requirements. Staff has received retraining on income calculation, third-party verification requirements, and documentation standards, including proper data entry and supporting documentation within Yardi. A supervisory quality control review process has been established requiring review and approval of all new admissions and annual/interim reexaminations to ensure eligibility determinations, income calculations, and participant records are accurate, complete, and supported before final processing. Responsible Official: HCV Program Director / Public Housing Manager Expected Completion Date: File audit and training completed by September 30, 2026; ongoing monitoring thereafter

View Audit 407829

Finding 1224566 (2025-002)

Material Weakness 2025

Housing Authority of the City of North Chicago

IL

HUD Housing Programs

Corrective Action Plan: The NCHA has implemented a structured SEMAP tracking and certification process, including designation of a SEMAP Coordinator responsible for indicator tracking and submission. A quality control review checklist aligned with SEMAP indicators has been implemented. Staff receive...

Corrective Action Plan: The NCHA has implemented a structured SEMAP tracking and certification process, including designation of a SEMAP Coordinator responsible for indicator tracking and submission. A quality control review checklist aligned with SEMAP indicators has been implemented. Staff received training in SEMAP documentation and compliance requirements to ensure accurate and complete submissions. Responsible Official: HCV Program Director (or Designee) with oversight by Executive Director/CEO Expected Completion Date: Implemented August 1, 2026; full compliance beginning next SEMAP cycle

View Audit 407829

Corrective Action Plans

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