Housing Authority of the County of Chester

Finding 2024-001: Missing Tenant Information (Material Weakness, Material Noncompliance) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public Housing Operating Fund Federal Assistance Listing Number: 14.850 Compliance Requirement: Eligibility Criteria: Per 2 CFR, PHAs are required to obtain documentation declaring the tenant is eligible to receive federal housing benefits, obtain release forms from tenants to gather necessary information from third parties, and perform annual recertifications of tenant income through HUD Form 50058. Condition: The Authority was unable to provide declarations of eligible status, signed release forms, and annual recertifications. Furthermore, the Authority did not calculate income correctly to determine tenant’s rent amount. Context: Out of the 10 tenant files reviewed, we found the following exceptions:  1 file did not have proper declaration of eligible status  1 file did not have updated signed release forms  5 files did not have income calculated correctly Effect: The Authority was not in compliance with the eligible requirements for the program. Cause: The Authority did not have the proper controls in place to ensure the files were complete and accurate. Repeat Finding: This is not a repeat finding. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure the recertifications are performed and the necessary documentation is adequately retained in the Authority’s files. Views of Responsible Officials: The Authority agrees with the finding.

Action Taken: Housing Authority of the County of Chester agrees with the above recommendations and has already instituted policies and procedures designed to address the findings. Please see the list of procedures. HACC Recertification & Documentation Checklist (Quick Reference – 1 Page) 1. Recertification Timeline • Annual: Start process 120 days before due date. • Interim: Complete within 30 days of household change. • Missed/Delayed: Notify Program Manager immediately and document reason. 2. Required Documentation • Income verification (pay stubs, benefits, child support). • Asset verification (bank/retirement statements). • Family composition docs (birth certificates, SSNs). • HUD-required forms. • Use EIV when available; seek third-party verification first. • All docs must be collected within 60 days of effective date. 3. File Standards • Use Resident File Checklist for each household. • Files must include all signed forms & verifications. • Store in approved secure system (electronic or paper). • Retain files 3 years after end of participation (longer if litigation/audit pending). 4. Internal Controls • Supervisory Review: 10% of files checked monthly. • Maintain clear audit trail (date notices, interviews, verifications). • Correct any deficiencies within 30 days. 5. Staff & Training • Staff handling certifications = annual HUD/HACC compliance training. • Document training completion in personnel file. 6. Monitoring • Quarterly compliance report on timeliness & file completeness. • Issues shared with Executive Director and Board. • Policies reviewed annually for updates. Roles • Housing Specialists: Complete recerts & file docs. • Supervisors: Monitor timeliness & review files. • Compliance Officer: Audit & reporting. • Executive Director: Oversight & resources. n Follow this checklist to ensure timely recertifications, complete documentation, and avoid audit findings.

FINDING #2023-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Voucher Cluster ALN: 14.871, 14.879 Award Period: 1/1/23 - 12/31/23 Type of Finding: Significant Deficiency Criteria or Specific Requirement: 24 CFR Sections 982.305 and 982.405 state that the PHA must inspect units under the HCVP at least annually to ensure the units meet Housing Quality Standards (HQS). 24 CFR sections 982.158(d) and 982.404 state that units under HAP contracts that fail to meet HQS, the PHA must require the owner to correct any life threatening HQS deficiencies within 24 hours after the inspections and all other HQS deficiencies within 30 calendar days, or withing a specified PHA-approved correction period. If the owner does not correct the cited HQS deficiencies withing the specified correction period, the PHA must stop (abate) HAPs beginning no later than the first of the month following the specified correction period or must terminate the HAP contract. Condition: During our testing, we noted that the Authority did not follow their internal controls designed to ensure compliance with tenant eligibility requirements. We noted one instance where a unit was not inspected during the year. In this instance, the Authority did not abate payments for this unit. We also noted one instance of a unit failing inspection, and not passing within the 30-day window. However, the Authority never put the unit into abatement. Known Questioned Costs: N/A Context: Testing of 40 HCVP files selected for eligibility testing noted exceptions in two files which included the following: – Two tenants who did not have an annual inspection done or properly passed during the year. Cause: The inspection company used by the Authority did not perform inspections when scheduled and failed to let the Authority know of missed inspections. Effect: The Authority is not in compliance with federal regulations regarding eligibility. The amount of housing assistance payments or tenant rent could be incorrect based on missing or inaccurate information. Repeat Finding: No Recommendation: We recommend that the Authority review their recertification process and their process for reporting the reinspections, and review the abatement process to ensure units are properly put into abatement when inspections are failed or incomplete. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2023-001 –– During our current year audit, it was noted that one HCVP was not inspected during the year. In this instance, the Authority did not abate payments for this unit. It was also noted one instance of a unit failing inspection, and not passing within the 30 day window. However, the Authority never put the unit into abatement. Recommendation – We recommend that the Authority review their recertification process and their process for reporting the reinspection, and review the abatement process to ensure units are properly put into abatement when inspections are failed or incomplete. Action Taken – Chester County Housing Authority management agrees with the above recommendation and has instituted policies and procedures designed to address this finding. (Please see the list of approved policies and procedures.)