Allentown Housing Authority

Finding 2024-002: 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: 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 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 1,634 units. Of a sample size of twenty-nine (29) tenant files, the following was noted: Verification of income was missing in 1 file Lead based paint form was missing in 1 file. Our sample size is statistically valid. Known Questioned Costs: $8,500 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 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.

Finding 2024-002: 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: 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 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 1,634 units. Of a sample size of twenty-nine (29) tenant files, the following was noted: • Verification of income was missing in 1 file • Lead based paint form was missing in 1 file Our sample size is statistically valid. Known Questioned Costs: $8,500 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 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. Views of responsible officials and planned corrective action: 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. Julio Guridy, Executive Director, will be responsible to implement this corrective action by June 30, 2025.

2023-002

2023 – 001 Housing Choice Voucher Program Annual HQS Inspections Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Federal Award Identification Number and Year: PA004 (various funding increments active during period 7/1/22-6/30/23) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 24 CFR 982.405(a) and in accordance with the HCVP Administration Plan, completed HQS inspections must be completed within two years of the HUD-50058 effective date listed on the HUD-50058. Condition: During our testing, we noted the Authority did not complete the Annual HQS inspections in an adequate time frame. Questioned Costs: Unknown. Context: In a statistically valid sample, during our testing of 60 files selected for Annual HQS Inspection Testing, we noted the following: 1 out of 60 Annual HQS inspections was not completed within two years of the HUD-50058 effective date listed on the HUD-50058. Cause: Per discussion with Aida Nunez, Director of Housing Management, scheduling conflicts between the inspectors and tenants resulted in untimely HQS inspections. Effect: The Authority is not in compliance with program requirements over Annual HQS inspections. Repeat Finding: Not a repeat. Recommendation: We recommend the Authority review their procedures for performing Annual HQS inspections in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

Action taken in response to finding: To avoid future scheduling conflicts and delays, secure vendor several month in advance. Name(s) of the contact person(s) responsible for corrective action: Aida Núñez Planned completion date for corrective action plan: April 2024

2023 – 002 Housing Choice Voucher Program Reasonable Rent Testing – New Tenants Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Federal Award Identification Number and Year: PA004 (various funding increments active during period 7/1/22-6/30/23) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority’s HCVP administrative plan, application require the completion of rent determination through use of automated database, showing 3 comparable rents for units located in the same area, with similar amenities, size, and condition for rent reasonableness. The rent determination form must be properly entered into the HDS system prior the HUD 50058 effective date. Condition: During our testing of 24 files for Reasonable Rent – New Tenants requirements. criteria, we noted the following: 2 of 24 files had rent determination forms that were not approved in the HDS system until after the HUD 50058 effective date. Questioned Costs: Unknown. Context: In a statistically valid sample, during our testing of 24 files for Reasonable Rent – New Tenants criteria, we noted the following: 2 of 24 files had rent determinations processed after their effective date. Cause: The Authority does not have controls in place to ensure it is meeting Reasonable Rent – New Tenants requirements set by HUD. Effect: The Authority is not in compliance with their administrative plan regarding Reasonable Rent – New Tenants requirements. Repeat Finding: Not a repeat. Recommendation: We recommend the Authority review their procedures for performing. Reasonable Rent – New Tenants requirements. Views of responsible officials: There is no disagreement with the audit finding.

Action taken in response to finding: Create a reasonable rent management SOP. Name(s) of the contact person(s) responsible for corrective action: Aida Núñez Planned completion date for corrective action plan: April 2024

2023 – 003 Housing Choice Voucher Program –Eligibility and HAP Payment Testing Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Federal Award Identification Number and Year: PA004 (various funding increments active during period 7/1/22-6/30/23) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 24 CFR Part 908 and 24 CFR section 982.158, the Authority is required to electronically submit the HUD-50058 form to HUD each time they complete an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family. Per 24 CFR section 982.158 and 24 CFR Part 982, Subpart K, PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register. Per 24 CFR section 982.516, for both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent. Condition: During our testing of 60 tenant files for eligibility criteria, we noted the following: 4 of 60 tenant files had incorrectly calculated incomes. 2 of 60 tenant files missing proper 3rd party asset verification. 1 of 60 tenant files was not able to be located in the PIC system. Questioned Costs: $2,233 Context: • In a statistically valid sample, during our testing of 60 tenant files for eligibility criteria, we noted the following: 4 of 60 tenant files had incorrectly calculated incomes. 2 of 60 tenant files missing proper 3rd party asset verification. 1 of 60 tenant files was not able to be located in the PIC system. Cause: The authority does not have controls in place to ensure it is meeting Eligibility and HAP Payment Testing requirements set by HUD. Effect: The authority is not in compliance with HUD guidelines over eligibility or HAP payments. Repeat Finding: Repeat finding, 2022-003. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 003 Housing Choice Voucher Program –Eligibility and HAP Payment Testing (Continued) Recommendation: We recommend the Authority review their process for maintaining third party verification of income, for uploading data to PIC, and for recalculating household income. Views of responsible officials: There is no disagreement with the audit finding.

Action taken in response to finding: Create a third party verification policy and procedure SOP. Name(s) of the contact person(s) responsible for corrective action: Doryan Campo Planned completion date for corrective action plan: April 2024

2022-003

2022 ? 001 Housing Choice Voucher Program QC Inspections Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Material Weakness, Material Noncompliance (Qualified Opinion) Criteria or specific requirement: Per chapter 10 of the HCVP Guidebook, completed HQS inspections included in the QC inspection sample must be no older than 3 months at the time of the reinspection. Condition: During our testing of 8 files selected for QC Testing, we noted the following: 7 out of 8 QC re-inspections were not completed within three months of the original inspection. Questioned Costs: Unknown. Context: During our testing of 8 files selected for QC Testing, we noted the following: 7 out of 8 QC reinspections were not completed within three months of the original inspection. Cause: Per discussion with Aida Nunez, Director of Housing Management, said that due to Covid, it was difficult to get a QC inspector within the three-month time period. Effect: The Authority is not in compliance with program requirements over QC inspections. Recommendation: We recommend the Authority review their procedures for performing QC inspections in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.

U.S Department of Housing and Urban Development 2022-001 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend the Authority review their procedures for performing QC inspections in a timely manner. Explanation of disagreement with audit finding: The Housing Authority disagrees with the finding. We employ a third party vendor to conduct QC inspections. Due to the Pandemic we were unable to secure a vendor without a backlog. Additionally, the HA had a waiver. Action taken in response to finding: To avoid future backlogs secure vendor several month in advance. Name(s) of the contact person(s) responsible for corrective action: Aida Nu?ez Planned completion date for corrective action plan: September, 2023

2022 ? 002 Housing Choice Voucher Program Wait List Testing ? New Tenants Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Federal Award Identification Number and Year: PA004 (various funding increments active during period 7/1/21-6/30/22) Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per the Authority?s administrative plan, applicants are placed on the waiting list based on any preference and then by the date and time of their initial application. Per the Authority?s administrative plan, AHA will notify the family when selected from the waiting list via a notification letter. Condition: During our testing of 25 files for wait list criteria, we noted the following: 1 of 25 files had an application that was not date stamped. 1 of 25 files was missing a wait list selection letter. Questioned Costs: Unknown. Context: In a statistically valid sample, during our testing of 25 files for wait list criteria, we noted the following: 1 of 25 files had an application that was not date stamped; 1 of 25 files was missing a wait list selection letter. Cause: The Authority does not have controls in place to ensure it is meeting Wait List Testing ? New Tenants requirements set by HUD. Effect: The Authority is not in compliance with their administrative plan regarding the waiting list. Repeat Finding: Not a repeat. Recommendation: We recommend the Authority review their processes for maintaining documentation for tenant selection from the waiting list. Views of responsible officials: There is no disagreement with the audit finding.

U.S Department of Housing and Urban Development 2022-002 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend the Authority review their processes for maintaining documentation for tenant selection from the waiting list. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Create a waiting list management SOP. Name(s) of the contact person(s) responsible for corrective action: Aida Nu?ez Planned completion date for corrective action plan: April 2023

2022 ? 003 Housing Choice Voucher Program Eligibility and HAP Payment Testing Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Program Assistance Listing Number: 14.871 Federal Award Identification Number and Year: PA004 (various funding increments active during period 7/1/21-6/30/22) Award Period: July 1, 2021 ? June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per 24 CFR Part 908 and 24 CFR section 982.158, the Authority is required to electronically submit the HUD-50058 form to HUD each time they complete an admission, annual reexamination, interim reexamination, portability move-in, or other change of unit for a family (82-L4). Per 24 CFR section 982.158 and 24 CFR Part 982, Subpart K, PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register. Per 24 CFR section 982.516, for both family income examinations and reexaminations, obtain and document in the family file third party verification of (1) reported family annual income; (2) the value of assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income or income-based rent. Condition: During our testing of 40 tenant files for eligibility criteria, we noted the following: 1 of 40 tenant files had an incorrect HAP amount uploaded in the PIC system. 1 of 40 tenant files missing an up-to-date HAP Amendment Letter. 2 of 40 tenant files missing proper 3rd party income verification. During our testing of 40 tenant files for HAP Payment criteria, we noted 1 of 40 tenant files wherein the HAP amount reported on the HUD-50058 did not match that found on the HAP Contract Amendment. Questioned Costs: $106 Context: In a statistically valid sample, during our testing of 40 tenant files for eligibility criteria, we noted the following: 1 of 40 tenant files had an incorrect HAP amount uploaded in the PIC system. 1 of 40 tenant files missing an up-to-date HAP Amendment Letter. 2 of 40 tenant files missing proper 3rd party income verification. In a statistically valid sample, during our testing of 40 tenant files for HAP Payment criteria, we noted 1 of 40 tenant files wherein the HAP amount reported on the HUD-50058 did not match that found on the HAP Contract Amendment. Cause: The authority does not have controls in place to ensure it is meeting Eligibility and HAP Payment Testing requirements set by HUD. Effect: The authority is not in compliance with HUD guidelines over eligibility or HAP payments. Repeat Finding: Not a repeat. Recommendation: We recommend the Authority review their process for maintaining 3rd party verification of income, for uploading data to PIC, and for generating HAP amendment letters. Views of responsible officials: There is no disagreement with the audit finding.

U.S Department of Housing and Urban Development 2022-003 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend the Authority review their process for maintaining 3rd party verification of income, for uploading data to PIC, and for generating HAP amendment letters. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Create a third party verification policy and procedure SOP. Name(s) of the contact person(s) responsible for corrective action: Doryan Campo Planned completion date for corrective action plan: April 2023

2019-001 Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Housing Choice Voucher Program CFDA: 14.871 Award Period: 07/01-2018 ? 06/30/2019 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 24 CFR sections 982.158(d) and 982.405(b) states the PHA must inspect the units leased to a family at least bi-annually to determine if the unit meets Housing Quality Standards (HQS) and prepare a unit inspection report. According to the Housing Choice Voucher Program Guidebook, completed HQS inspections included in the QC inspection sample must be no older than three months at the time of the reinspection. Condition: During our testing, we noted the Authority did not follow their internal controls designed to ensure compliance with annual inspection requirements. Questioned Costs: Unable to determine Context: Testing of 40 units selected from a population of over 250 leased units for annual HQS inspection testing noted one unit did not have inspections performed and documented within the required two-year period. A separate sample of eight units selected from a population of 45 quality control reinspections identified six quality control reinspections were not performed within three months of the initiating inspection. Cause: The PHA did not perform biennial inspections timely. In addition, they did not perform quality control reinspections within the required time period. Effect: The Authority is not in compliance with Federal regulations and the PHA administrative plan for the Housing Choice Voucher Program. Repeat Finding: Yes, 2018-003, 2017-002 Recommendation: We recommend that Management review their procedures to ensure all units requiring HQS inspections and quality control inspections are inspected timely. Views of Responsible Officials: There is no disagreement with the audit finding.

Department of Housing and Urban Development The Housing Authority of the City of Allentown respectfully submits the following corrective action plan for the year ended June 30, 2019. Audit period: July 1, 2018 ? June 30, 2019 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS ? FEDERAL AWARD PROGRAMS AUDIT 2019-001 Housing Choice Voucher Cluster ? CFDA No. 14.871 Condition: During our testing, we noted the Authority did not follow their internal controls designed to ensure compliance with annual inspection requirements. Recommendation: We recommend that Management review their procedures to ensure all units requiring HQS inspections and quality control inspections are inspected timely. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Director of Housing Management is reviewing HQS PIC report weekly and follows up with inspector. Staff is more attentive and looking at inspection dates during annual recertification. Name of the contact person responsible for corrective plan: Aida Nu?ez & Doryan Campo Planned completion date for corrective action plan: Ongoing If the Department of Housing and Urban Development has questions regarding this plan, please call Daniel Farrell, Executive Director at (610)-439-8919.

2018-003

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2017-002

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2017-003

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2017-002

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