Lansing Housing Commission

Assistance Listing Number, Federal Agency, and Program Name 14.850, U.S. Department of Housing and Urban Development, Public and Indian Housing Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Significant deficiency and material noncompliance with laws and regulations Repeat Finding Yes 2022-001 Criteria As a condition of a tenant's admission or continued occupancy, the Commission is required to adjust the tenant rent and housing assistance payment as necessary using documentation from third party verification (24 CFR Sections 960.253, 960.257, and 960.259). Condition For 8 tenants in a sample of 23 tenants selected in conjunction with eligibility testing, the Commission failed to either correctly calculate family income composition or did not retain required documentation supporting eligibility determinations. Questioned Costs N/A Identification of How Questioned Costs Were Computed N/A Context During testing of 23 tenants selected for eligibility testing, we identified the following issues: For 2 of the 23 tenants selected, the Commission did not retain the appropriate consent from the tenant to verify third party income. For 1 of the 23 tenants selected, the Commission did not retain documentation of the tenant's ID/Social Security number to independently verify citizenship. For 6 of the 23 tenants selected, the Commission incorrectly calculated the tenants' annual income due to administrative errors leading to inputs in to the calculation not agreeing to the underlying third party income verification received. Cause and Effect Controls to ensure initial eligibility determinations and eligibility recertifications were performed in accordance with federal regulations were not consistently followed. This led to an inability by the Commission to identify all timeliness and retention issues, as well as family income composition calculation errors. Recommendation The Commission should ensure that it has the appropriate controls and personnel in place to perform all eligibility determinations and recertifications in accordance with federal regulations. Controls should include proper reviews of the recertification documentation to ensure that family income composition is properly calculated, and that appropriate documentation is retained in the tenant's file for third party verification consent and to support the eligibility determinations made. Views of Responsible Officials and Corrective Action Plan The Commission is implementing a plan to internally audit 100 percent of all tenant files in the Low Income Public Housing (LIPH) program. This plan involves both the use of experienced employees and an outside consultant. As part of the plan, a system for timely updating and automating files will be implemented, recurring compliance issues will be identified and addressed, and expanded formal training and specific training will take place from the consultant. An additional level of review will also be put in place to assist in catching any inconsistencies in the process. The Commission has also added an operations manager and a staff person to oversee the LIPH program. These additional staff will be incorporated into the overall plan to strengthen controls to ensure program compliance.

Condition: For a sample of tenants selected in conjunction with eligibility testing, the Commission did not correctly calculate family income composition, and did not retain required documentation supporting eligibility determinations. Planned Corrective Action: The Commission is implementing a plan to audit internally 100 percent of all tenant files in our Low Income Public Housing (LIPH) program. This plan involves both the use of experienced employees and an outside consultant. The plan includes updating and automating files, identifying recurring compliance issues, and expanding formal training and specific training from the consultant. In addition, an additional level of review will be put in place to assist in catching any inconsistencies. The Commission has added additional employees to the LIPH program, which include an operations manager and a staff person. These additional resources will be incorporated into our overall plan to increase our compliance controls. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024

2022-001

Assistance Listing, Federal Agency, and Program Name 14.871, U.S. Department of Housing and Urban Development Housing Voucher Cluster Section 8 Housing Choice Vouchers Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Significant deficiency and material noncompliance with laws and regulations Repeat Finding No Criteria The Commission is required to re examine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516(a)(1)). Condition For 3 tenants out of a sample of 60 tenants, incorrect calculations were prepared during the recertification process, resulting in incorrect housing assistance payments for these tenants. Questioned Costs N/A Identification of How Questioned Costs Were Computed Utilization of correct income using third party verficiation in tenant rent and housing assistance payment calculation for year under audit. Context During the testing of 60 tenants selected for eligibility testing, we identified the following issues: For 2 out of 60 samples selected for eligibility testing, an error was identified in the calculation of the tenant's housing assistance payment, resulting in an underpayment. For 1 out of 60 samples selected for eligibility testing, an error was identified in the calculation of the tenant's housing assistance payment, resulting in an overpayment. Cause and Effect The Commission did not properly recertify the tenant's income based on third party verifications, which resulted in errors in the calculation of the housing assistance payments. The errors in calculation resulted in a total underpayment of assistance in the amount of $501 through the period under audit and an overpayment of assistance in the amount of $512 through the period under audit. Recommendation The Commission should complete tenant recertifications in accordance with applicable federal regulations. Views of Responsible Officials and Planned Corrective Actions The Commission acknowledges the incorrect subsidy calculations and has issued refunds to the tenants in the amount of underpayment of subsidy. The Commission has also adjusted future funding requests for the overpayment of subsidy.

Condition: For a sample of tenants, a recertification was not completed properly, resulting in an incorrect calculation of housing assistance payments to be received. Planned Corrective Action: The Commission acknowledges the incorrect subsidy calculations and has issued refunds to the tenants in the amount of underpayment of subsidy. The Commission has also adjusted future funding requests for the overpayment of subsidy. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024

Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria 24 CFR 578.73(a) The recipient must match all grant funds, except for leasing funds, with no less than 25 percent of funds or in kind contributions from other sources. 24 CFR 578.103(a)(11) The recipient must keep records of the source and use of contributions made to satisfy the match requirement in § 578.73. The records must indicate the grant and fiscal year for which each matching contribution is counted. 2 CFR 200.306(b) For all Federal grants, any matching funds must be accepted as part of the recipient’s match when such contributions meet all seven of the criteria listed in this regulation including being verifiable from the non Federal entity's records; 2 CFR 200.306(c) Unrecovered indirect costs, including indirect costs on match may be included as part of match only with the prior approval of HUD. Unrecovered indirect cost means the difference between the amount charged to the grant and the amount which could have been charged to the grant under the recipient’s approved negotiated indirect cost rate. Condition The Commission was unable to provide adequate source documentation to support that the match requirement was met. Questioned Costs $136,138 Identification of How Questioned Costs Were Computed Amount is the result of an unresolved finding from a monitoring visit from HUD. Context In July 2023, HUD issued a finding related to amounts submitted for match requirements for grant MI0196L5F082013 in the total amount of $136,138. In addition, during audit testing of the match requirement, the Commission was unable to provide adequate source documentation to support that the match requirement was met for the grant agreements with period end dates during the audit period and for annual performance reports required. Due to the timing of HUD's report and the 2023 single audit, management was unable to adjust grant billings for grants whose grant period had already closed out. Cause and Effect Internal control policies were not in place to identify costs charged for matching that were not adequately documented. This lack of documentation results in noncompliance with the Uniform Guidance resulting in questioned costs of $136,138 at June 30, 2023. Recommendation We recommend the Commission review its processes and controls to verify that all costs charged to the grant, including those costs charged to satisfy the match requirement, are adequately documented, consistent with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD, after completion of an on site monitoring visit that the Commission's claimed matching expenses were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitoried and in place for the new program.

Condition: The Commission was unable to provide adequate source documentation to support that the match requirement was met. Planned Corrective Action: Management agrees that match requirements for Continuum of Care awards have not been maintained as required by the Uniform Guidance. In July 2023, management was notified by HUD after completion of an on-site monitoring visit that the Commission's claimed matching expenses that were not adequately supported by source documentation. In response, management has placed in service additional controls to ensure the compliance requirements are being monitored and in place for the new program. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024

Assistance Listing, Federal Agency, and Program Name 14.267, U.S. Department of Housing and Urban Development Continuum of Care Program Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria The Commission should have written policies in place that comply with appropriate grant regulations (24 CFR 576.500(b), 24 CFR 578.103(c), 24 CFR 578.103(d), 24 CFR 578.91(b)(4), 24 CFR 578.75(g)(1 & 2), 24 CFR 578.103(a)(13)). The Commission is also required to retain their grant agreements in accordance with 2 CFR 200.334. Condition The Commission did not have required written policies in place during the year under audit nor could copies of grant agreements be provided for when the Commission became the direct recipient of the grant awards. Questioned Costs N/A Identification of How Questioned Costs Were Computed N/A Context During the year ended June 30, 2023, the Commission became the direct recipient of the Continuum of Care awards from the City of Lansing, Michigan. In July 2023, HUD performed an on site monitoring review of the program and issued several findings related to lack of required written policies. Cause and Effect The City of Lansing was the direct recipient of the Continuum of Care grant and the Commission was the subrecipient until September 2022. No policies, procedures, training, or technical assistance was provided by the City when the Commission became the direct recipient. Management was unaware of all the program requirements. As a result, the Commission violated several regulations and could potentially violate others due to a lack of understanding of program policies and procedures to ensure program compliance. Additionally, the Commission was unable to provide all of the grant agreements from the City. Recommendation We recommend the Commission review all grant regulations to ensure all required written policies have been adopted and that all appropriate agreements are in place and accessible. Additionally, the Commission should work with the City and HUD to obtain all the grant agreements from the date of transition. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding as reported. To correct this finding, the Commission reviewed its policies and procedures and revised them as needed to comply with federal regulations. The policies were presented and approved at the August 2023 board meeting. The Commission has sent the revised policies to HUD for its review and approval.

Condition: The Commission did have required written policies in place during the year under audit or retained copies of grant agreements once they became the direct recipient of the grants. Planned Corrective Action: Management agrees with the finding as reported. To correct this finding, the Commission reviewed its policies and procedures and revised as needed to comply with federal regulations. The policies were presented and approved at the August 2023 board meeting. The Commission has sent revised policies to HUD for their review and approval. Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 6/30/2024

Assistance Listing Number, Federal Agency, and Program Name: 14.850, U.S. Department of Housing and Urban Development, Public and Indian Housing Federal Award Identification Number and Year: N/A Pass through Entity: N/A Finding Type: Material weakness Repeat Finding: No Criteria: As a condition of a tenant's admission or continued occupancy, the Commission is required to examine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using documentation from third party verification (24 CFR sections 960.253, 960.257, and 960.259) Condition: For a sample of tenants selected in conjunction with eligibility testing, the Commission did not perform reexaminations within the required 12 month timeline, did not correctly calculate family income composition, and did not retain required documentation supporting eligibility determinations. Questioned Costs: N/A Identification of How Questioned Costs Were Computed: N/A Context: During testing of 40 tenants selected for eligibility testing, we identified the following issues: For 5 of the 40 tenants selected, the Commission did not perform eligibility reexaminations within 12 months of the previously performed examination. For 1 of the 40 tenants selected, the Commission was unable to provide original documentation from a tenant's file to support that tenant's consent was obtained or that related third party support was obtained in connection with determination of eligibility and calculation of assistance. For 1 of the 40 selections, the Commission did not retain documentation of the tenant's ID/Social Security number to independently verify citizenship For 4 of our 40 selections, the Commission incorrectly calculated the tenants' annual income due to administrative errors leading to inputs in to the calculation not agreeing to the underlying third party income verification received Cause and Effect: Controls to ensure eligibility recertifications were performed in accordance with federal regulations were not consistently followed. This led to an inability by the Commission to identify all timeliness and retention issues, as well as family income composition calculation errors. Recommendation: The Commission should ensure that they have the appropriate controls and personnel in place to perform all reexamintaions in accordance with federal regulations. This includes a proper review to ensure recertifications are completed within the required 12 month period, that family income composition is properly calculated, and that appropriate documentation is retained in the tenant's file to support the eligibility determinations made. Views of Responsible Officials and Corrective Action Plan: The commission is implementing a plan to audit internally 100% of all tenant files in our Low Income Public Housing (LIPH) program. This plan involves both the use of experienced employees and an outside consultant. The plan includes updating and automating files, identifying recurring compliance issues and expanding formal training and specific training from the consultant. In addition, an additional level of review will be put in place to assist in catching any inconsistencies. The Commission has added additional employees to the LIPH program which include an operations manager and a staff person. These additional resources will be incorporated into our overall plan to increase our compliance controls.

Finding Number: 2022-001 Condition: For a sample of tenants selected in conjunction with eligibility testing, the Commission did not perform reexaminations within the required 12-month timeline, did not correctly calculate family income composition, and did not retain required documentation supporting eligibility determinations. Planned Corrective Action: The commission?s plan is to audit 100% of the remaining tenant files in the next 90 days. This audit will involve a combination of the commission?s more experienced employees as well as the assistance of an outside consultant. All identified findings will be reviewed, and additional training will be provided to help facilitate better compliance timeliness and accuracy Contact person responsible for corrective action: Steve Raiche Anticipated Completion Date: 01/31/2023

CFDA Number, Federal Agency, and Program Name U.S. Department of Housing and Urban Development Direct programs Housing Voucher Cluster 14.871 Federal Award Identification Number and Year n/a Pass through Entity n/a Finding Type Significant deficiency Repeat Finding No Criteria The Commission is required to reexamine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third party verification (24 CFR section 982.516(a) (1)). Condition A recertification was not completed properly resulting in an incorrect calculation of housing assistance payments to be received. Questioned Costs None Identification of How Questioned Costs Were Computed n/a Context For 1 of 40 tenants selected for eligibility testing, an error was identified in the calculation of the tenant's housing assistance payment. Cause and Effect The Commission did not recertify a tenant and overlooked a change in tenant income, which resulted in an error in the calculation of the housing assistance payments. The error in calculation resulted in an underpayment of assistance in the amount of $134 through the period under audit. Recommendation The Commission should complete tenant recertifications in accordance with applicable federal regulations. Views of Responsible Officials and Corrective Action Plan The Commission acknowledges the incorrect subsidy calculation and has issued a refund to the tenant in the amount of the underpayment of subsidy.

Finding Number: 2021-001 Condition: A recertification was not completed properly resulting in an incorrect calculation of housing assistance payments to be received. Planned Corrective Action: Each month the Director of Housing Programs or their appointed designee will run a report at the beginning and end of each month to show what recertifications are due, and which are still outstanding. The Director of Housing programs or their designee will than follow up with staff to determine the status of each outstanding recertification. The Director of Housing Programs or their designee will also run a report in PIC and compare to the recertifications completed and those that remain outstanding and follow up with the appropriate staff member. Contact person responsible for corrective action: Kim Shirey Director of Housing Programs Anticipated Implementation Date: Immediately 1/14/2022

CFDA Number, Federal Agency, and Program Name - U.S. Department of Housing and Urban Development - Direct programs - Low-rent Public Housing and Development - 14.850 Federal Award Identification Number and Year - Not applicable Pass-through Entity - Not applicable Finding Type - Significant deficiency Repeat Finding - Yes 2015-005, 2016-003, 2017-002 Criteria - Under 24 CFR 5.230, 5.601, 5.609, 960.206, 960.208, 960.253, 960.255, 960.257, and 960.259, the Commission must: a. As a condition of admission or continued occupancy, require the participant and other family members to provide necessary information, documentation, and releases for the Commission to verify income eligibility. b. For both family income examinations and re-examinations, 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. c. Determine income eligibility and calculate the participant?s rent payment using documentation from third-party verification. d. Re-examine family income and composition at least once every 12 months and adjust the tenant rent and housing assistance payment as necessary using the documentation from third-party verification. Condition - Some participant files tested did not include complete information to support participant eligibility and/or the level of benefits provided. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - 40 participant files were tested and the results are as follows: (1) Three participant file included income at the incorrect amount on HUD- 50058 due to improper determination of income based on third-party detail. (2) One participant file did not have a completed annual recertification performed during the fiscal year. (3) Three participant files did not have key documentation verification related to identification documents or social security card. (4) One participant file had insufficient support of the participant's rent payment after the documentation for an interim certification was not maintained in the participant's file. Cause and Effect - Controls in place have not resulted in the Commission consistently following policies and procedures to ensure proper compliance with regard to participant eligibility requirements. The Commission could be charging the incorrect amount of tenant rent or could be housing ineligible tenants. Recommendation - The Commission should follow established procedures to ensure eligibility is documented and complete tenant files are maintained. Periodic internal review of tenant files would help identify errors in a timely manner. In addition, tenant rent payment calculations should be prepared and reviewed by individuals with the appropriate skills and knowledge necessary to ensure complete and accurate forms resulting in correct tenant rent payments. Views of Responsible Officials and Planned Corrective Actions - The Commission shall strengthen asset management file oversight, increase the number of file reviews conducted, and establish and maintain a file quality control process to improve regulatory compliance.

Finding Number: 2019-001 Condition: Some participant files tested did not include complete information to support participant eligibility and/or the level of benefits provided. Planned Corrective Action: The Commission shall strengthen asset management file oversight, increase the number of file reviews conducted, and establish and maintain a file quality control process to improve regulatory compliance. Contact person responsible for corrective action: Doug Fleming, Executive Director Anticipated Completion Date: 06/30/2020

GSA_MIGRATION

GSA_MIGRATION

2016-004

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GSA_MIGRATION

2016-003, 2015-005

GSA_MIGRATION

GSA_MIGRATION

2015-005

GSA_MIGRATION

GSA_MIGRATION

2015-004, 2014-005

GSA_MIGRATION

GSA_MIGRATION