County of PassaicLocal Government

FEDERAL AWARDS Finding 2023-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing 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. 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 Agency’s files and on discussion with management, there were discrepancies noted on the HUD-50058's. Context: Of a sample size of twenty one (21) tenant files, we noted the following: • Income was miscalculated on the HUD-50058 form in one (1) file Our sample size is statistically valid. Known Questioned Costs: $304 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 Agency 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 Agency design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Agency Response: The Agency accepts the recommendation of the auditor. The Agency will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.

Finding 2023-002 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Housing Choice Vouchers Program Federal Assistance Listing 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 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 Agency’s files and on discussion with management, there were failed inspections that did not pass reinspection within 30 days without penalty. Context: There are approximately one hundred and sixty eight (168) units with failed inspections. Of a sample size of twenty-five (25) failed inspections, one (1) failed inspection did not pass reinspection within 30 days, due to the Agency not performing the reinspection within a timely manner. Housing assistance payments were not abated nor was the tenant evicted. Our sample size is statistically valid. Known Questioned Costs: $3,412 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 Agency has not properly performed HQS inspections in compliance with program requirements. Effect: The Section 8 Housing Choice Vouchers Program is in non-compliance with the special test and provisions type of compliance related to HQS inspections. Recommendation: We recommend the Agency design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement. Agency Response: The Agency accepts the recommendation of the auditor. The Agency will increase oversight in the Section 8 Housing Choice Vouchers Program to ensure that established internal control policies are being followed on a timely basis.

Finding 2019-001 Information on the federal program: Shelter Plus Care, CFDA # 14.238 Criteria or specific requirement: Special Tests and Provision compliance requires the Housing assisted under the Shelter Plus Care Program must meet applicable housing quality standards. HUD required that the County obtain Housing Quality Inspections Yearly. Condition: The County?s process in place to perform and collect on-site fiscal and programmatic information about their sub-recipients is not working properly as designed. Questioned costs: None. Context: The County does not perform a sufficient amount of the required on-site fiscal and programmatic procedures over their sub-recipients. There were 8 instances where an up to date Housing Quality Standards inspection were not in a participants file. There were 3 instances where there was no lease obtained for the 2019 year in the participants file. Effect: Failure to perform fiscal and programmatic procedures results in non-compliance with the specific program requirements in accordance with 24 CFR section 582.305 & 24 CFR section 882.803). Cause: The County does not have a system in place to ensure that the proper inspections and documentation is kept in accordance with Uniform Guidance and HUD Requirements . Recommendation: A process be developed and implemented to ensure proper documentation is collected and onsite fiscal and programmatic procedures are performed.