Housing Authority of Bergen County

Corrective Action Plan For the year ended March 31, 2020 U.S. Department of Housing and Urban Development: The Housing Authority of Bergen County respectfully submits the following corrective action plan for the year ended March 31, 2020. Auditor: Novogradac and Company, LLP Certified Public Accountants 1433 Hooper Avenue Suite 329 Toms River, New Jersey 08753 The findings from the March 31, 2020 schedule of findings and responses are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Findings - Financial Statement Audit Reference 2020-001 Criteria: The Authority is responsible for the preparation and timely filing of Forms 1099 and 1096 to the Internal Revenue Service ("IRS"). Condition: During our audit, we noted that the Authority was late in its 2017, 2018, and 2019 annual filings of Form 1099 and 1096 to the IRS. This is considered by the IRS to be a failure to comply with information reporting requirements. Cause: The Authority did not have proper internal control procedures in place to ensure the timely filing of Forms 1099 and 1096 to the IRS. Effect: The IRS can issue significant penalties for each form that is not issued and filed in a timely manner. The Authority was issued penalties in the amount of $513,758 for their late filings of Forms 1099 and 1096. Recommendation: The Authority should draft and adopt procedures in order to comply with IRS filing requirements in a timely manner. Authority Response: The Authority accepts the recommendation of the auditor and has made arrangements to comply with IRS filing requirements. Al Restaino, Accounting Manager is responsible to implement this corrective action by December 31, 2020. Reference 2020-002 We consider Reference 2020-002 listed below to also be a financial statement finding. Federal Award Findings and Questioned Costs Reference 2020-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Eligibility Criteria: Tenant Files (Section 8 Housing Choice Vouchers Program) - The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management there were a significant number of documents that were unavailable for examination at the time of audit. Context: There are approximately 3,816 units. Of a sample size of 44 tenant files, the following was noted: ? The lead based paint form was missing in 2 files ? The signed lease was missing in 2 files ? Rent reasonableness documentation was missing in 1 file Our sample size is statistically valid. Known Questioned Costs: $33,540 Known questioned costs were calculated by annualizing the monthly HAP payments of the files that were out of compliance. Cause: There is a material weakness in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The affected files relate to clients that have been on the program for decades and as files get large, archiving takes place. To correct this finding, a directive will be issued to staff that will ensure that when files are archived the original application must be placed in the current working file going forward. Al Restaino, Accounting Manager is responsible to implement this corrective action by December 31, 2020. Schedule of Prior Year Audit Findings Finding 2019-001 Observation: Of a sample size of 41 tenant files, the following information was unavailable for examination at the time of audit: ? The lead based paint form was missing in 2 files ? The citizenship declaration form was missing in 1 file ? The consent to release information form was missing in 1 file ? Rent reasonableness documentation was missing in 1 file Status: The finding remains open. See Finding 2020-002. Finding 2019-002 Observation: Of a sample size of 25 units that had initially failed inspection, five (5) units did not pass reinspection within 30 days. HAP abatements were not processed in accordance with Program compliance requirements for those five (5) units. Status: The finding has been cleared.

2019-001

Corrective Action Plan For the year ended March 31, 2019 U.S. Department of Housing and Urban Development: The Housing Authority of Bergen County respectfully submits the following corrective action plan for the year ended March 31, 2019. Auditor: Novogradac and Company, LLP Certified Public Accountants 1433 Hooper Avenue Suite 329 Toms River, New Jersey 08753 The findings from the March 31, 2019 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Findings- Financial Statement Audit There were no findings related to the financial statements which are required to be reported in accordance with government auditing standards generally accepted in the United States of America. Federal Award Findings and Questioned Costs Finding 2019-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? E. Eligibility ? Tenant Files Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Eligibility Criteria: Tenant Files (Section 8 Housing Choice Vouchers Program). The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family member to provide necessary information, documentation, and releases for the PHA to verify income eligibility (24 CFR sections 5.230, 5.609, and 982.516). These files are required to be maintained and available for examination at the time of audit. Condition: Based upon inspection of the Authority?s files and on discussion with management there were a significant number of documents that were unavailable for examination at the time of audit. Context: There are approximately 3,655 units. Of a sample size of 41 tenant files, the following information was unavailable for examination at the time of audit: - The lead based paint form was missing in 2 files - The citizen declaration form was missing in 1 file - The consent to release information form was missing in 1 file. - Rent reasonableness documentation was missing in 1 file. Our sample size is statistically valid. Known Questioned Costs: $6,468 Known questioned costs were calculated by annualizing the monthly HAP payments of the files that were out of compliance. Cause: There is a significant deficiency in internal controls over the compliance for the eligibility type of compliance related to the maintenance of tenant files. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that reasonably assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the eligibility type of compliance related to the maintenance of tenant files. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: The Authority accepts the recommendation of the auditor. The affected files relate to clients that have been on the program for decades and as files get large, archiving takes place. To correct this finding, a directive will be issued to staff that will ensure that when files are archived the original application must be placed in the current working file going forward. Kevin McCann is responsible to remedy the deficiency by March 30, 2020.

Corrective Action Plan For the year ended March 31, 2019 U.S. Department of Housing and Urban Development: The Housing Authority of Bergen County respectfully submits the following corrective action plan for the year ended March 31, 2019.Finding 2019-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Catalog Numbers: 14.871 Noncompliance ? N. Special Tests and Provisions ? Housing Quality Standards Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Housing Quality Standards Inspections. The PHA must inspect the unit leased to a family at least bi-annually to determine if the unit meets the Housing Quality Standards (HQS) and the PHA must conduct quality control re-inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). For units that fail inspection the PHA must correct all life threatening HQS deficiencies within 24 hours and all other deficiencies within 30 days. Condition: Based upon inspection of the Authority?s files and on discussion with management, there were units that had not passed re-inspection within the required thirty day period and abatements had not been processed for those units. Context: Of a sample size of 25 units that had initially failed inspection, five (5) units did not pass re-inspection within 30 days. HAP abatements were not processed in accordance with Program compliance requirements for those five (5) units. Our sample size is statistically valid. Our sample size is statistically valid. Known Questioned Costs: $2,538 Known questioned costs were calculated based on the days that HAP payments should have been abated due to the late passing of unit reinspections. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly considered, designed, implemented, maintained and monitored a system of internal controls that assures the program is in compliance. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the special tests and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Authority design and implement internal control procedures that will assure compliance with the Uniform Guidance and the compliance supplement. Authority Response: We agree with the Auditor?s observations on the re-inspection of the failed units. However, the PHA must implement more oversight to ensure that the internal control policies are being followed in a timely manner to show improvement in this area. Kevin McCann is responsible to remedy the deficiency by March 30, 2020. Auditor: Novogradac and Company, LLP Certified Public Accountants 1433 Hooper Avenue Suite 329 Toms River, New Jersey 08753 The findings from the March 31, 2019 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule.

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2016-001

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