TOWN OF VERNON HOUSING AUTHORITY

2024-001 – INTERNAL CONTROLS OVER COMPLIANCE Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN #: 14.871 – Housing Choice Voucher Program ALN #: 14.850 – Public Housing Operating Fund CRITERIA A recipient of federal funding must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. (2 CFR 200.303(a)) CONDITION During our review of internal controls over compliance, which included reviewing monitoring reports from federal agencies, we identified the following matters: • The Authority did not have a policy in place governing the use of HUD’s Enterprise Income Verification (EIV) system. • The Authority was not following its administrative plan for the Housing Choice Voucher program related to minimum rents. The Authority has not established a minimum rent policy for Public Housing. • The Authority did not have a written methodology for how it conducts annual quality control reviews of HCV participant files. • The Authority did not follow its administrative plan regarding terminating participant from the Housing Choice Voucher Program. The Authority did not have a policy addressing participants being terminated from the Public Housing Program. • The VHA was not in compliance with updated Violence Against Women Act (VAWA) requirements. • The Authority’s day-to-day practices for the administration of the Public Housing program differ from the Admissions and Continued Occupancy Policy. • The Authority did not have a Section 3 policy. • The Authority did not follow its Administrative Plan related to preferences for the Project Based Voucher (PBV) waiting list. CAUSE The Authority did not perform a review and update its compliance policies for changes in HUD regulations. EFFECT The lack of updated or written policies increases the risk of noncompliance with federal requirements, as staff may not have clear guidance. QUESTIONED COSTS None identified. CONTEXT The Authority administers both the Housing Choice Voucher and Public Housing Programs. Uniform Guidance requires the Authority to have written policies related to compliance with federal statutes, regulations, and terms of federal awards. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Authority review all compliance-related policies and procedures and update or develop written documentation to align with current Uniform Guidance requirements. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Auditee’s Response and Corrective Action 2024-001- Internal Controls over Compliance These matters were identified in a HUD Compliance and Monitoring Report. Following this report, the VHA has taken the following corrective actions: • In June 2025, VHA adopted and implemented EIV/UIV policy • VHA contacted the system software customer service to see how to include the minimum rents as part of the payments standards. All payments standards for the VHA covered areashave been updated. • In June 2005, VHA established a minimum rent policy for Public Housing. • In June 2025, VHA adopted and implemented a Program Monitoring QA policy in accordance with HUD required SEMAP indicators. • In June 2005, VHA established adopted and implemented a voucher program termination policy and a Public Housing lease termination policy. . • In September 2025, the VHA implemented a Violence Against Women Act (VAWA) policy effective November 1, 2025. • VHA has reached out to Nan McKay for Assistance with developing a new Admissions and Continued Occupancy Plan (ACOP). • VHA has sent out 126 OBV preference update notices to all applicants currently on the PBV 0/1 bedroom waitlist. Only 21 have been returned to date. VHA will continue to collect and update preferences. Planned Implementation Date of Corrective Action: October 2025 Person Responsible for Corrective Action: Shenoa Steves, Housing Programs Manager

2024-002 – ELIGIBILITY – ELIGIBILITY FOR INDIVIDUALS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN #: 14.871 – Housing Choice Voucher Program CRITERIA The PHA must conduct a reexamination of family income and composition at least annually. (2) Except as provided in paragraph (a)(3) of this section, the PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available: (i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR 982.516 (a)) (1) As a condition of admission to or continued assistance under the program, the PHA shall require the family head, and such other family members as the PHA designates, to execute a HUD-approved release and consent form (2 CFR 982.516(g)) CONDITION As a result of our testing, we identified the following: • Six instances in which the PHA obtained sufficient verifications of income; however, the PHA calculated the annualized tenant income incorrectly or it was unclear how the PHA calculated annualized income. • Four instances of an incorrect payment standard being used. • Four instances in which HUD’s Enterprise Income Verification system was not used. • One instance of a missing release and consent form (HUD-9886) • One instance of an insufficient verification of income. CAUSE The Authority's system of obtaining and documenting third-party verifications of tenant’s income, assets, or deductions was not sufficient EFFECT The Authority did obtain proper verification and calculation of income, expenses, and deductions are used in calculating annual income, adjusted income, and thereby housing assistance payments. QUESTIONED COSTS None Noted. CONTEXT The Authority leased approximately 320 vouchers through the Housing Choice Voucher Program throughout the year. We selected a sample of 40 participant files. This was not a statistically valid sample REPEAT FINDING This finding is repeated from finding 2023-002. RECOMMENDATION We recommend policies and procedures are strengthened to ensure all proper documentation and annual recertification are maintained in all tenant files to document eligibility. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Auditee’s Response and Corrective Action 2024-002- Eligibility- Eligibility for Individuals (HCV) Response: Existing filing errors have been corrected. VHA will ensure/ demonstrate the accuracy of future filings with respect to income calculations, UA credits and allowances of HAP contracts. Vernon Housing has implemented the following: The agency FY 2024 audit noted fewer file issues as sample errors pointed out in FY 2023 have been corrected and reviewed with associated personnel. Vernon Housing Authority has a quality control program to ensure that all HCV files are complete and up to date. Since the beginning of 2024 and going forward into CY 2025 the Housing Programs Manager has reviewed all annual recertifications and interims completed by HCV associated staff for compliance and filing accuracy. In addition, structured filing and monthly quality control systems continue to be followed by HCV staff and program management. These are ongoing tasks that the program manager is responsible for overseeing. Management has implemented file management systems that are checked during monthly QA process to ensure proper file management. HCV program staff will continue to use file review checklist when performing annual and interim recertification procedures to ensure that the proper documentation is in the file. These are ongoing tasks that the program manager is responsible for overseeing. Management will continue to require staff to attend continued education trainings and obtain the necessary certifications for HCV staff requirements. Management will hold staff accountable for failure to adhere to the governing rules and regulations for file compliance. Planned Implementation Date of Corrective Action: October 2025 Person Responsible for Corrective Action: Shenoa Steves, Housing Programs Manager

2023-002

2023-002 – ELIGIBILITY – ELIGIBILITY FOR INDIVIDUALS Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN 14.871 – Section 8 Housing Choice Vouchers CRITERIA The PHA must conduct a reexamination of family income and composition at least annually. (2) Except as provided in paragraph (a)(3) of this section, the PHA must obtain and document in the tenant file third-party verification of the following factors, or must document in the tenant file why third-party verification was not available: (i) Reported family annual income; (ii) The value of assets; (iii) Expenses related to deductions from annual income; and (iv) Other factors that affect the determination of adjusted income. (2 CFR 982.516 (a)) (1) As a condition of admission to or continued assistance under the program, the PHA shall require the family head, and such other family members as the PHA designates, to execute a HUD-approved release and consent form (2 CFR 982.516(g)) CONDITION As a result of our testing, we identified the following: • Two instances of incorrect or incomplete verifications of income, assets, or deductions. • Two instances of incorrect payment standards used. • Two instances of utility allowance miscalculations. • One certification that was not completed timely. CAUSE The Authority's system of obtaining and documenting third-party verifications of tenant’s income, assets, or deductions was not sufficient. EFFECT The Authority did obtain proper verification and calculation of income, expenses, and deductions are used in calculating annual income, adjusted income, and thereby housing assistance payments. QUESTIONED COSTS None Noted. CONTEXT The Authority leased approximately 320 vouchers through the Housing Choice Voucher Program throughout the year. We selected a sample of 25 participant files. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend policies and procedures are strengthened to ensure all proper documentation and annual recertification are maintained in all tenant files to document eligibility. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan. SECTION IV – SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS No prior audit findings.

Response: Ensure that existing filing errors are corrected and to ensure that future filing accuracy is demonstrated. Vernon Housing is implementing the following: Vernon Housing has an existing quality control program to ensure that all HCV files are complete and up to date. In addition, Vernon Housing has reorganized itself with new staff being placed during the mid-year of FY23 and current. This Housing Program Manager position centralizes Housing program oversight with expertise necessary for a successful quality control system. The Agency fiscal year 2023 audit first noted the need for improved quality control Housing Choice voucher program and filing. The sample errors pointed out during the audit have been corrected and reviewed with associated personnel. Going forward since the beginning of CY 2024 the Housing program manager has reviewed all interims along with annual certifications completed by the direct reports for compliance and filing accuracy. A structured filing system has been identified for all staff personnel to follow and be assessed during the quality control review process. A monthly quality control schedule has been implemented to report to upper management during the department closing process. Management will continue to require staff to attend training and obtain the PH/HCV Specialist Certification as a mandatory job requirement. Management will continue efforts to standardize tenant files, perform supervisory and compliance file reviews and hold staff accountable for failure to adhere to the governing rules and regulations for file compliance. HCV Program staff will continue to use file review checklists when performing Recertification procedures, which require the review of Lease Addendums to ensure that the proper documentation is in the file. These are ongoing tasks. The Housing Program Manager will be responsible for these tasks. Planned Implementation Date of Corrective Action: October 2024 Person Responsible for Corrective Action: Shenoa Steves-Housing Program Manager

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION