Housing Authority of the City of Jersey CityLocal Government

Finding 2025-003 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV 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. The PHA must do the following: As a condition of admission or continued occupancy, require the tenant and other family members 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 documents that were unavailable for examination at the time of audit. Context: There are approximately four thousand eight hundred forty six (4,846) Housing Voucher Cluster units. Of a sample size of forty eight (48) tenant files, five (5) tenants' HUD-50058 forms included income that was miscalculated during their annual reexamination. Our sample size is statistically valid. Known Questioned Costs: $92,856 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 reasonably assures the program is in compliance. Effect: The Housing Voucher Cluster 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 reasonably assure compliance with the Uniform Guidance and the compliance supplement.

Finding 2025-004 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers, and Emergency Housing Vouchers Federal Assistance Listing Numbers: 14.871, 14.879, and 14.EHV Noncompliance - N. Special Tests and Provisions - Selection from the Waiting List Non Compliance Material to the Financial Statements: Yes Material Weakness in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Section 8 Administrative Plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203 (Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. “Selection” from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new move-in list and discussions with management, it could not be determined with any certainty that certain new move-ins to the Housing Voucher Cluster were selected from the waiting list in an order that is in accordance with the Authority’s Section 8 Administrative Plan. Context: There were approximately three hundred fifteen (315) newly leased Housing Voucher Cluster units. Of a sample size of twenty five (25) new move-ins, nineteen (19) could not be determined to be housed in proper order from the Authority's waiting list. Our sample size is statistically valid. Known Questioned Costs: $368,136 Cause: There is a material weakness in internal controls over the compliance for the special tests and provisions type of compliance related to selection from the waiting list. The Authority has not properly housed applicants in compliance with program requirements. Effect: The Housing Voucher Cluster is in material non-compliance with the special tests and provisions type of compliance related to selection from the waiting list. Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.

Finding 2025-005 Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Housing Voucher Cluster - Section 8 Housing Choice Vouchers, Mainstream Vouchers and Emergency Housing Vouchers Programs Federal Assistance Listing Number: 14.871, 14.879 and 14.EHV Noncompliance – N. Special Tests and Provisions – Housing Quality Standards Inspections Non Compliance Material to the Financial Statements: Yes Material Weakness 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 Authority’s files and on discussion with management, there were units that were not inspected within the annual inspection period. Context: There are approximately four thousand eight hundred forty six (4,846) Housing Voucher Cluster units. Of a sample size of forty eight (48) tenant files, nine (9) annual inspections were not completed in a timely manner. Our sample size is statistically valid. Known Questioned Costs: $166,632 Cause: There is a material weakness in internal controls for the Housing Voucher Cluster over the compliance for the special tests and provisions type of compliance related to HQS inspections. The Authority has not properly performed annual HQS inspections in compliance with program requirements. Effect: The Housing Voucher Cluster 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 reasonably assure compliance with the Uniform Guidance and the compliance supplement.

Reference 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 ? 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 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 20 units that had initially failed inspection, one (1) unit did not pass reinspection within 30 days. HAP abatements were either not processed or not processed in accordance with Program compliance requirements for the one unit noted. Our sample size is statistically valid. 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.

Reference 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 Material 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 4,000 units. Of a sample size of 43 tenant files, the following was noted: ? Original application was missing in 1 file ? HUD 9887 Form was missing in 1 file ? Signed leases were missing in 4 files ? Rent reasonableness documentation was missing in 1 file ? Annual HUD 50058 Form was missing in 1 file ? Verification of income and assets was missing in 1 file ? Annual Inspection report was missing in 1 file Our sample size is statistically valid. Known Questioned Costs: $58,915 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. The non-compliance is also material to the financial statements. 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.

Reference 2019-003: 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 ? Waiting List Non Compliance Material to the Financial Statements: No Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions Criteria: Selections from the Waiting List. The PHA must have written policies in its Housing Choice Vouchers Program administrative plan for selecting applicants from the waiting list and PHA documentation must show that the PHA follows these policies when selecting applicants from the waiting list. Except for as provided in 24 CFR section 982.203 (Special admission (non-waiting list), all families admitted to the program must be selected from the waiting list. ?Selection? from the waiting list generally occurs when the PHA notifies a family whose name reaches the top of the waiting list to come in to verify eligibility for admission (24CFR sections 5.410, 982.54(d), and 982.201 through 982.207). Condition: Based upon inspection of the waiting list provided to us during the time of audit, the new movein list and discussions with management, it could not be determined with any certainty that certain new move-ins to the Housing Choice Vouchers Program were selected from the wait list in an order that is in accordance with the Authority?s policy. Context: A sample size of twenty five (25) names were selected from the new move-in list and those names were to be traced to the waiting list to verify that the new move-in were chosen in an order that was in accordance with the Authority?s policy. It was determined that one (1) out of twenty five (25) new move-in selected could not be traced with any certainty back to the Authority's waiting list. Cause: There is a significant deficiency in internal controls over the compliance for the special tests and provisions type of compliance. 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 selections from the waiting list. 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 Auditors' findings. The Authority 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. 56

Reference 2019-004: Federal Agency: U.S. Department of Housing and Urban Development Federal Program Titles: Section 8 Mainstream Vouchers (MS5) Federal Catalog Numbers: 14.879 Material 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 (Mainstream Vouchers) - 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 194 units. Of a sample size of 12 tenant files, the following was noted: ? Original application was missing in 2 files ? Signed leases were missing in 3 files ? Rent reasonableness documentation was missing in 1 file Our sample size is statistically valid. Known Questioned Costs: $35,840 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 Mainstream Vouchers Program is in material non-compliance with the eligibility type of compliance related to the maintenance of tenant files. The non-compliance is also material to the financial statements. 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.