ROCHESTER HOUSING AUTHORITY

Criteria - Under the Procurement, Suspension, and Debarment compliance requirement for the Public and Indian Housing Program (Assistance Listing Number 14.850), small purchases in excess of $1,000, but not exceeding $25,000 no less than three offerors shall be solicited to submit price quotations. These quotes may be obtained orally, by telephone, or in writing, as allowed by State or local laws. Award shall be made to the offeror providing the lowest acceptable quotation, unless justified in writing based on price and other specified factors, such as for architect-engineer contracts. If non-price factors are used, they shall be disclosed to all those solicited. The names, addresses, and/or telephone numbers of the offerors and persons contacted, and the date and amount of each quotation shall be recorded and maintained as a public record (unless otherwise provided in State or local law). For purchases above the Authority’s small purchase threshold, the level of detail will vary but should be commensurate with the size (i.e. dollar value), complexity, and commercial nature of the requirement. Condition - During our testwork over compliance with the Procurement, Suspension, and Debarment requirements of the Public and Indian Housing Program (14.850), we selected three procurement contracts for review and the Authority was unable to provide one of the selected contracts. As a result, we were unable to ensure that the contract adheres to federal regulations and the contractors were not suspended, debarred, or otherwise excluded from participating in federal programs. Cause - The Authority does not have a process in place for documenting contracts procured throughout the year to ensure all compliance requirements are properly met. 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 - $9,368 Recommendation - We recommend the Authority make the following improvements to internal controls: • Evaluate the need for open-end contracts and procure these services in accordance with the procurement policy at least annually. • Ensure there is a comprehensive process in place to meet the requirements necessary for sole-source and emergency procurements. • Provide sufficient procurement training to all employees responsible for procurement. Management’s Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - Procurement policies over record retention will be implemented. (c) Planned implementation date of corrective action - Completed by September 30, 2024.

Criteria - Housing assisted under the Shelter Plus Care Program must meet applicable housing quality standards (HQS) under 24 CFR Section 582.305. Before any assistance is provided on behalf of a participant, the nonfederal entity, or another entity acting on behalf of the nonfederal entity (other than the owner of the housing), must physically inspect each unit to ensure that the unit meets housing quality standards. Nonfederal entities must also inspect all units annually during the grant period to ensure that units continue to meet housing quality standards (24 CFR Section 582.305(a)). It is also the responsibility of the nonfederal entity to determine whether the rent charged for the unit receiving assistance is reasonable in relation to rents being charged for comparable unassisted units. For SRO units, rents are calculated in accordance with 24 CFR section 882.805(d) (24 CFR section 582.305(b)). Condition - The Authority did not perform an annual HQS inspection or rent reasonableness determination for 12 out of 21 units sampled for testwork. Cause - The Authority’s procedures called for biennial inspections of properties. Effect - The Authority was not in compliance with HQS inspection or rent reasonableness requirements of the program. Questioned Costs - None identified. Repeat Finding - This is a repeat of finding 2022-002. Recommendation - We recommend the Authority update processes to ensure all properties are being inspected and a rent determination is being performed on at least an annual basis. Management’s Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - HQS inspections of Shelter Plus Care properties will be performed on an annual basis. (c) Planned implementation date of corrective action - Completed by September 30, 2024.

Criteria - Housing assisted under the Shelter Plus Care Program must meet applicable housing quality standards (HQS) under 24 CFR Section 582.305. Before any assistance is provided on behalf of a participant, the nonfederal entity, or another entity acting on behalf of the nonfederal entity (other than the owner of the housing), must physically inspect each unit to ensure that the unit meets housing quality standards. Nonfederal entities must also inspect all units annually during the grant period to ensure that units continue to meet housing quality standards (24 CFR Section 582.305(a)). Condition - The Authority did not perform an annual HQS inspection for 11 out of 21 units sampled for testwork. Cause - The Authority?s procedures called for biennial inspections of properties. Effect - The Authority was not in compliance with HQS inspection requirements of the program. Questioned Costs - None identified. Recommendation - We recommend the Authority update processes to ensure all properties are being inspected on at least an annual basis. Management?s Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - HQS inspections of Shelter Plus Care properties will be performed on an annual basis. (c) Planned implementation date of corrective action - Completed by September 30, 2023.

Criteria - The Authority must prepare a SEFA for the period covered by the Authority's financial statements which must include the total Federal awards expended by individual Assistance Listing Number as determined in accordance with ?200.502 basis for determining Federal awards expended. Condition - The amount originally reported in the SEF A by the Authority for the Public and Indian Housing Program (Assistance Listing No. 14.850) and Capital Fund Program (CFP) (Assistance Listing No. 14.872) did not agree to amounts expended during the year ended September 30, 2021. Additionally, the Authority did not properly report amounts received related to Emergency Housing Vouchers (EHV) (Assistance Listing No. 14.871). Cause - The Authority reported the operating portion of the Capital Fund Program under Assistance Listing No. 14.850 instead of 14.872. Additionally, the Authority reported all activity related to EHV under the Housing Choice Vouchers Program (HCV) and did not create a new column in the Real Estate Assessment Center's (REAC) Financial Data Schedule (FDS) as required by HUD. Effect - The amount originally reported in the SEFA for CFP was understated by $838,377 and the amount reported for the Public and Indian Housing Program was overstated by $838,377. Additionally, HCV was overstated by $476,877 related to EHV, of which, $204,750 should have been reported as unearned revenue. Questioned Costs - None identified. Repeat Finding - This is repeat finding of 2020-002 as reported for the year ended September 30, 2020. Recommendation - We recommend the Authority formalize its year end accounting policies and ensure that the SEFA contains all grants awarded to the Authority and establish procedures to track federal grant activity by Assistance Listing number in accordance with grant agreements. Additionally, we recommend verifying the total amount of expenditures on an individual grant basis per review of the general ledger account balances prior to submitting the unaudited FDS. Management's Response - Name of Auditee: Rochester Housing Authority Name of Audit Firm: EFPR Group, CP As, PLLC Period Covered by the Audit: September 30, 2021 CAP Prepared by: Sinclair Carrington, Interim Finance Director Phone: (585) 697-6163 (A) Current Finding on the Schedule of Findings and Questioned Costs and Recommendations (1) Finding 2021-001 (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation, please see below for action taken. (b) Action taken - The Finance department will keep a record of all grants awarded to the Authority and reconcile the amounts received to the amounts reported in-the FDS. Additionally, a review of the amounts being reported on the Data Collection Form for Federal Awards expended will be verified to the amounts received in the FDS.

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