GLOVERSVILLE HOUSING AUTHORITYLocal Government

2024-002 – REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN #: 14.871/14.879 – Housing Voucher Cluster ALN #: 14.850 – Public and Indian Housing CRITERIA Financial Reports (OMB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the HCV and PIH programs. CONDITION The unaudited submission was required to be submitted to HUD by December 15, 2024. The Authority submitted the unaudited submission on January 6, 2025. CAUSE The Authority’s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority ensure its year-end closing process is sufficient to allow for the timely filing of the unaudited FDS. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-003 – ELIGIBILITY Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871/14.879 – Housing Voucher Cluster CRITERIA PHA responsibility for reexamination and verification. (1) The PHA must conduct a reexamination of family income and composition at least annually. (2) 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. (24 CFR 982.516) CONDITION The Authority did not provide tenant files for 6 tenants selected. CAUSE The Authority did not properly oversee the administration of the Housing Choice Voucher and Mainstream Voucher programs. EFFECT The Authority is potentially incorrectly calculating and adjusting tenant rent and housing assistance payments. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 40 from a population of 243. This was not a statistically valid sample. REPEAT FINDING See finding 2022-003. RECOMMENDATION We recommend the Authority’s management take an active role in reviewing their policies and monitoring the Authority’s compliance with those policies. We recommend the Authority provide training for the performance of reexamination procedures. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

023-004 – REPORTING: PERFORMANCE REPORTING Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871/14.879 – Housing Voucher Cluster CRITERIA 24 CFR § 985 – The Section 8 Management Assessment Program (SEMAP) is designed to assess whether the Section 8 tenant-based assistance programs operate to help eligible families afford decent rental units at the correct subsidy cost. SEMAP also establishes a system for HUD to measure the Authority’s performance in key Section 8 program areas and to assign performance ratings. The method for selecting the Authority’s quality control sample must leave a clear audit trail that can be used to verify that the Authority’s quality control sample was drawn in an unbiased manner. CONDITION The Authority was not able to provide the supporting documentation used to conduct the SEMAP assessment. CAUSE The Authority did not properly oversee the administration of the Housing Choice Voucher and Mainstream Voucher programs. EFFECT The Authority incorrectly conducted the SEMAP certification and potentially incorrectly reported the performance rating. QUESTIONED COSTS None noted. CONTEXT The Authority conducts the SEMAP assessment on an annual basis. REPEAT FINDING See finding 2022-005. RECOMMENDATION The Authority should ensure that adequate supporting documentation is retained on a go forward basis. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

023-005 – ELIGIBILITY Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA For both family income examinations and reexamination, obtain and document in the family file third-party verification of (1) reported family annual income (2) the value of assets (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR Section 960.259). Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 subpart F (24 CFR section 5.601 et seq.) (24CFR sections 960.253, 960.255, 960.259). CONDITION As a result of our audit, we identified the following exceptions in our testing: Fourteen (14) instances of income, asset or medical expense miscalculation or insufficient verification. Fifteen (15) instances of untimely reexamination. CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT Redetermination of tenant’s rent was not performed in accordance with HUD regulations. As a result, tenants may have paid more or less in rent than they should have paid. QUESTIONED COSTS None noted. CONTEXT We selected a sample of 40 from a population of 243. This was not a statistically valid sample. REPEAT FINDING See finding 2022-006. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-006 – PROCUREMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing ALN #: 14.872 – Public Housing Capital Fund CRITERIA Any contract not exceeding $20,000 made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $20,000 no less than three offerors shall be solicited to submit price quotations. (Gloversville Housing Authority Procurement Policy) CONDITION We examined a sample of 9 vendors, (5 Public and Indian Housing and 4 Public Housing Capital Fund), used for goods and services during fiscal year 2023 and identified 9 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation. CAUSE The Authority’s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS Estimated questioned costs of $1,050,569 representing the total payments to these 9 vendors. CONTEXT We selected a sample of 9 from a population of approximately 43 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING See finding 2022-007. RECOMMENDATION We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan

2022-003 – ELIGIBILITY Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871/14.879 – Housing Voucher Cluster CRITERIA PHA responsibility for reexamination and verification. (1) The PHA must conduct a reexamination of family income and composition at least annually. (2) 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. (24 CFR 982.516) CONDITION As a result of our audit, we identified the following exceptions in our testing:  Four (4) instances of incorrect utility allowance  Two (2) instances of income, asset or medical expense miscalculation or insufficient verification  One (1) instance of incorrect payment standard CAUSE The Authority did not properly oversee the administration of the Housing Choice Voucher and Mainstream Voucher programs. EFFECT The Authority is potentially incorrectly calculating and adjusting tenant rent and housing assistance payments. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 25 from a population of 251. This was not a statistically valid sample. REPEAT FINDING See finding 2021-003. RECOMMENDATION We recommend the Authority’s management take an active role in reviewing their policies and monitoring the Authority’s compliance with those policies. We recommend the Authority provide training for the performance of reexamination procedures. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2022-004 – REPORTING Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871/14.879 – Housing Voucher Cluster ALN #: 14.850 – Public and Indian Housing CRITERIA Financial Reports (OMB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the HCV and PIH programs. CONDITION The audited submission was required to be submitted to HUD by June 30, 2023. CAUSE The Authority’s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING See finding 2022-004. RECOMMENDATION We recommend that the Authority ensure its year-end closing process is sufficient to allow for the timely filing of the unaudited FDS. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2022-005 – REPORTING: PERFORMANCE REPORTING Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.871/14.879 – Housing Voucher Cluster CRITERIA 24 CFR § 985 – The Section 8 Management Assessment Program (SEMAP) is designed to assess whether the Section 8 tenant-based assistance programs operate to help eligible families afford decent rental units at the correct subsidy cost. SEMAP also establishes a system for HUD to measure the Authority’s performance in key Section 8 program areas and to assign performance ratings. The method for selecting the Authority’s quality control sample must leave a clear audit trail that can be used to verify that the Authority’s quality control sample was drawn in an unbiased manner. CONDITION The Authority was not able to provide the supporting documentation used to conduct the SEMAP assessment. CAUSE The Authority did not prepare sufficient documentation to support the procedures and conclusions of their assessment. EFFECT The Authority incorrectly conducted the SEMAP certification and potentially incorrectly reported the performance rating. QUESTIONED COSTS None identified. CONTEXT The Authority conducts the SEMAP assessment on an annual basis. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should ensure that adequate supporting documentation is retained on a goforward basis. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2022-006 – ELIGIBILITY Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA For both family income examinations and reexamination, obtain and document in the family file third-party verification of (1) reported family annual income (2) the value of assets (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent (24 CFR Section 960.259). Determine income eligibility and calculate the tenant’s rent payment using the documentation from third-party verification in accordance with 24 CFR Part 5 subpart F (24 CFR section 5.601 et seq.) (24CFR sections 960.253, 960.255, 960.259). CONDITION As a result of our audit, we identified the following exceptions in our testing:  Twenty-one (21) instances of income, asset or medical expense miscalculation or insufficient verification  Five (5) instances of untimely reexaminations CAUSE The Authority’s system of internal controls over the participant recertification process was not sufficient to meet the requirements established by HUD. EFFECT Redetermination of tenant’s rent was not performed in accordance with HUD regulations. As a result, tenants may have paid more or less in rent than they should have paid. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 25 from a population of 268. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority develop and implement a recertification checklist to accompany the tenant file to ensure all required documentation is obtained. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2022-007 – PROCUREMENT AND SUSPENSION AND DEBARMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.850 – Public and Indian Housing CRITERIA Any contract not exceeding $20,000 made in accordance with the small purchase procedures. Contract requirements shall not be artificially divided so as to constitute a small purchase. For small purchases over $2,000, but not greater than $20,000 no less than three offerors shall be solicited to submit price quotations. (Gloversville Housing Authority Procurement Policy). CONDITION We examined a sample of 5 vendors used for goods and services during fiscal year 2022 and identified 5 instances where the Authority did not follow their procurement policy or did not retain sufficient supporting documentation. CAUSE The Authority’s internal control over procurement was not effective at identifying the need for competitive procurement in instances where frequently recurring transactions resulted in aggregate purchase in excess of competitive procurement thresholds. EFFECT The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. QUESTIONED COSTS Estimated questioned costs of $319,710 representing the total payments to these 5 vendors. CONTEXT We selected a sample of 5 from a population of approximately 50 vendors paid in excess of the micro-purchase threshold. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority improve its monitoring of contracts and periodically assess the procurement implications of cumulative payments to frequently used vendors. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2021-002 – INTERNAL CONTROL OVER COMPLIANCE Material Weakness CRITERIA Per Uniform Guidance (2 CFR Part 200.302), the grantee must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the grantee is managing the Federal award in compliance with statutes, regulations, and the terms and conditions of the Federal award. CONDITION The Authority did not maintain proper monitoring, communication and control activities to ensure adherence to the Authority’s key administrative policies including procurement, occupancy and the HCV administrative plan. The Authority outsourced the management of the Housing Choice Voucher and Mainstream Voucher programs and did not properly monitor the activities of those programs. The third party management company adopted and maintained policies and procedures for the Authority without board approval. CAUSE The Authority did not have proper oversight of their Housing Choice Voucher and Mainstream Voucher programs. EFFECT This deficiency in internal controls resulted in material noncompliance, which could affect the Authority's ability to manage and report on Federal awards accurately. QUESTIONED COSTS None noted. CONTEXT We reviewed the Authority’s internal controls over compliance with federal awards. REPEAT FINDING See finding 2020-002. RECOMMENDATION We recommend the Authority’s management take an active role in reviewing their policies and monitoring the Authority’s compliance with those policies. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2021-003 – ELIGIBILITY Material Weakness/Noncompliance U.S. Department of Housing and Urban Development CFDA #:14.871/ 14.879 – Housing Voucher Cluster CRITERIA PHA responsibility for reexamination and verification. (1) The PHA must conduct a reexamination of family income and composition at least annually. (2) 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. (24 CFR 982.516) CONDITION As a result of our audit, we identified the following exceptions in our testing:  Ten (10) instances of incorrect payment standard  Two (2) instances of incorrect utility allowance CAUSE The Authority did not properly oversee the administration of the Housing Choice Voucher and Mainstream Voucher programs. EFFECT The Authority is potentially incorrectly calculating and adjusting tenant rent and housing assistance payments. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 25 from a population of 251. This was not a statistically valid sample. REPEAT FINDING See finding 2020-003. RECCOMENDATION We recommend the Authority’s management take an active role in reviewing their policies and monitoring the Authority’s compliance with those policies. We recommend the Authority provide training for the performance of reexamination procedures. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan

2021-004 – REPORTING Material Weakness/Noncompliance U.S. Department of Housing and Urban Development CFDA #:14.871/ 14.879 – Housing Voucher Cluster CRITERIA Financial Reports (0MB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the HCVP. CONDITION The audited submission was required to be submitted to HUD by June 30, 2022. CAUSE The Authority’s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING See finding 2020-004.

2020-002– INTERNAL CONTROL OVER COMPLIANCE MATERIAL WEAKNESS CRITERIA Per Uniform Guidance (2 CFR Part 200.302), the grantee must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the grantee is managing the Federal award in compliance with statutes, regulations, and the terms and conditions of the Federal award. CONDITION The Authority did not maintain proper monitoring, communication and control activities to ensure adherence to the Authority’s key administrative policies including procurement, occupancy and the HCV administrative plan. The Authority outsourced the management of the Housing Choice Voucher and Mainstream Voucher programs and did not properly monitor the activities of the those programs. The third party management company adopted and maintained policies and procedures for the Authority without board approval. CAUSE The Authority did not have proper oversight of their Housing Choice Voucher and Mainstream Voucher programs. EFFECT This deficiency in internal controls resulted in material noncompliance, which could affect the Authority's ability to manage and report on Federal awards accurately. QUESTIONED COSTS None noted. CONTEXT We reviewed the Authority’s internal controls over compliance with federal awards. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Authority’s management take an active role in reviewing the their policies and monitoring the Authority’s compliance with those policies. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2020-003– ELIGIBILITY MATERIAL WEAKNESS/NONCOMPLIANCE U.S. Department of Housing and Urban Development CFDA #:14.871/ 14.879 – Housing Voucher Cluster CRITERIA PHA responsibility for reexamination and verification. (1) The PHA must conduct a reexamination of family income and composition at least annually. (2) 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. (24 CFR 982.516) CONDITION As a result of our audit procedures, we identified the following exceptions in our testing:  Six (6) instances of income, asset or medical expense miscalculation or insufficient verification  Twelve (12) instances of incorrect utility allowance  Two (2) instances of incorrect payment standard CAUSE The Authority did not properly oversee the administration of the Housing Choice Voucher and Mainstream Voucher programs. EFFECT The Authority is potentially incorrectly calculating and adjusting tenant rent and housing assistance payments. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 25 from a population of 251. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Authority provide training for the performance of reexamination procedures. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2020-004– REPORTING MATERIAL WEAKNESS/NONCOMPLIANCE U.S. Department of Housing and Urban Development CFDA #:14.871 / 14.879 – Housing Voucher Cluster CRITERIA Financial Reports (0MB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the HCVP. CONDITION The audited FDS was required to be submitted to HUD by September 30, 2021. CAUSE The Authority’s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority ensure its year-end closing process is sufficient to allow for the timely filing of the unaudited FDS. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Condition - During our testwork over the eligibility requirement related to the Public and Indian Housing Program (CFDA #14.850), we noted one occasion where no audit evidence existed related to the independent verification of the tenant?s income. Additionally, the Authority was unable to locate the signed applications for two tenants. Criteria - For both family income examinations and reexaminations, the Authority must obtain and document in the family file third-party verification of (1) reported family annual income, (2) the value of assets, (3) expenses related to deductions from annual income, and (4) other factors that affect the determination of adjusted income or income-based rent. Additionally, the Authority must determine income eligibility and calculate the tenant?s rent payment using the documentation from third-party verification. Effect - No audit evidence that the tenant in question was income eligible for the program through third-party verification. Recommendation - As a condition of admission or continued occupancy, the Authority needs to require the tenant and other family members to provide necessary information, documentation, and releases for the Authority to verify income. Additionally, the Authority should use the third-party income verification website in order to properly comply with this requirement. Furthermore, all documentation should be retained in the corresponding tenant?s file. Management?s Response - The Authority?s occupancy staff has successfully completed NanMcKay Public Housing rent calculation training. This provided staff with training that conforms to the industry standards and is uniform in nature. The Authority?s Admission and Continued Occupancy Policy (ACOP) has been revised and approved by HUD to show the hierarchy of verification and continued staff training will be provided. Additionally, checklists are being generated to assist staff.