Sawyer County Housing Authority

2024-001 Documentation Retention – Tenant File (Compliance) Federal Program: Housing Voucher Cluster; CFDA #14.871 Federal Agency: U.S. Department of Housing and Urban Development Award Period: 2024 Information on universe and population size The universe consisted of all Housing Choice Voucher (HCV) files for tenants certified and re-certified by the Authority for the fiscal year. The total population was 182. Sample size information A non‑statistical sample of 19 tenant files were selected for testing. One error was identified. Identification as a repeat finding This is not a repeat finding. Criteria HUD Housing Choice Voucher Program guidance (HUD Handbook 7420.7, Chapter 5) requires PHAs to retain complete tenant files, including form HUD‑50058, executed leases, income verification, rent determinations and related support, for a minimum of three years after final action. Statement of condition During our review of 19 tenant files, one file had missing required documents. The required documents that were not included consisted of the executed lease, rent determinations, and inspection documentation. Although alternate documents were provided during audit fieldwork to confirm the tenant’s eligibility, the required original supporting documentation was unavailable. Cause Management inadvertently shredded the information from the file upon the exit of the tenant from the program in April, 2025. Effect Absent proper documentation, the Authority cannot fully demonstrate tenant eligibility, increasing the risk of ineligible assistance payments and regulatory noncompliance. Because the issue was isolated to a single tenant file, the likelihood of material misstatement or widespread noncompliance is remote; however, it represents a significant deficiency. Auditor non-compliance code R – Section 8 Program Administration Questioned costs None Views of responsible officials Management concurs with the finding and is in the process of implementing an electronic document‑management system with automated backup and periodic supervisory reviews to prevent future occurrences. Context This was an isolated instance of noncompliance, affecting 1 of 19 tenant files tested. No systemic issues were noted in the other files reviewed. Recommendation We recommend that the Authority design and implement a record‑retention policy and require supervisory review prior to any file purging to ensure all required documentation is retained.Finding resolution status Unresolved Information on universe and population size The universe consisted of all Housing Choice Voucher (HCV) files for tenants certified and re-certified by the Authority for the fiscal year. The total population was 182. Sample size information A non‑statistical sample of 19 tenant files were selected for testing. One error was identified. Identification as a repeat finding This is not a repeat finding. Criteria HUD Housing Choice Voucher Program guidance (HUD Handbook 7420.7, Chapter 5) requires PHAs to retain complete tenant files, including form HUD‑50058, executed leases, income verification, rent determinations and related support, for a minimum of three years after final action. Statement of condition During our review of 19 tenant files, one file had missing required documents. The required documents that were not included consisted of the executed lease, rent determinations, and inspection documentation. Although alternate documents were provided during audit fieldwork to confirm the tenant’s eligibility, the required original supporting documentation was unavailable. Cause Management inadvertently shredded the information from the file upon the exit of the tenant from the program in April, 2025. Effect Absent proper documentation, the Authority cannot fully demonstrate tenant eligibility, increasing the risk of ineligible assistance payments and regulatory noncompliance. Because the issue was isolated to a single tenant file, the likelihood of material misstatement or widespread noncompliance is remote; however, it represents a significant deficiency. Auditor non-compliance code R – Section 8 Program Administration Questioned costs None Views of responsible officials Management concurs with the finding and is in the process of implementing an electronic document‑management system with automated backup and periodic supervisory reviews to prevent future occurrences. Context This was an isolated instance of noncompliance, affecting 1 of 19 tenant files tested. No systemic issues were noted in the other files reviewed. Recommendation We recommend that the Authority design and implement a record‑retention policy and require supervisory review prior to any file purging to ensure all required documentation is retained.

2024-002 Documentation Retention – Tenant File (Internal Control) Information on universe and population size The universe consisted of all Housing Choice Voucher (HCV) files for tenants certified and re-certified by the Authority for the fiscal year. The total population was 182. Sample size information A non‑statistical sample of 19 tenant files were selected for testing. One error was identified. Identification as a repeat finding This is not a repeat finding. Criteria 2 CFR §200.303(c) requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable laws, regulations, and program requirements. HUD Housing Choice Voucher Program guidance (HUD Handbook 7420.7, Chapter 5) includes that maintaining complete tenant files, including form HUD-50058, executed leases, income verification, rent determinations, inspection documentation, and related support, is a key control. Statement of condition During our review of 19 tenant files, one file had missing required documents. The required documents that were not included consisted of the executed lease, rent determinations, and inspection documentation. Although alternative documentation confirmed the tenant’s eligibility in the program, the absence of the required original supporting records demonstrates that the controls over document retention and safeguarding were not operating effectively. Cause The PHA lacks a formalized record‑retention control that prevents accidental deletion or destruction of tenant files and does not perform a supervisory review to verify that all electronic and hard‑copy records are archived before files are purged. Effect Absent proper documentation, the PHA cannot fully demonstrate tenant eligibility, increasing the risk of ineligible assistance payments and regulatory noncompliance. Because the issue was isolated to a single tenant file, the likelihood of material noncompliance is remote; however, it represents a significant deficiency. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and is in the process of implementing an electronic document‑management system with automated backup and periodic supervisory reviews to prevent future occurrences. Context This was an isolated instance of noncompliance, affecting 1 of 19 tenant files tested. No systemic issues were noted in the other files reviewed. Recommendation We recommend that the Authority design and implement a record‑retention policy and require supervisory review prior to any file purging to ensure all required documentation is retained.Finding resolution status Unresolved Information on universe and population size The universe consisted of all Housing Choice Voucher (HCV) files for tenants certified and re-certified by the Authority for the fiscal year. The total population was 182. Sample size information A non‑statistical sample of 19 tenant files were selected for testing. One error was identified. Identification as a repeat finding This is not a repeat finding. Criteria 2 CFR §200.303(c) requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable laws, regulations, and program requirements. HUD Housing Choice Voucher Program guidance (HUD Handbook 7420.7, Chapter 5) includes that maintaining complete tenant files, including form HUD-50058, executed leases, income verification, rent determinations, inspection documentation, and related support, is a key control. Statement of condition During our review of 19 tenant files, one file had missing required documents. The required documents that were not included consisted of the executed lease, rent determinations, and inspection documentation. Although alternative documentation confirmed the tenant’s eligibility in the program, the absence of the required original supporting records demonstrates that the controls over document retention and safeguarding were not operating effectively. Cause The PHA lacks a formalized record‑retention control that prevents accidental deletion or destruction of tenant files and does not perform a supervisory review to verify that all electronic and hard‑copy records are archived before files are purged. Effect Absent proper documentation, the PHA cannot fully demonstrate tenant eligibility, increasing the risk of ineligible assistance payments and regulatory noncompliance. Because the issue was isolated to a single tenant file, the likelihood of material noncompliance is remote; however, it represents a significant deficiency. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and is in the process of implementing an electronic document‑management system with automated backup and periodic supervisory reviews to prevent future occurrences. Context This was an isolated instance of noncompliance, affecting 1 of 19 tenant files tested. No systemic issues were noted in the other files reviewed. Recommendation We recommend that the Authority design and implement a record‑retention policy and require supervisory review prior to any file purging to ensure all required documentation is retained.

2024-003 Time and Effort Documentation (Internal Control) Federal Program: Housing Voucher Cluster; CFDA #14.871 Federal Agency: U.S. Department of Housing and Urban Development Award Period: 2024 Finding resolution status Unresolved Information on universe and population size The universe and population consisted of 26 payroll periods. Sample size information A non‑statistical sample of 3 payroll periods were selected for testing.  Identification as a repeat finding This is a repeat finding. Criteria 2 CFR §200.430(i) requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed and that are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. HUD guidance reiterates the requirement for after the fact time and activity documentation to support payroll allocations to grants. Statement of condition Payroll allocations for four employees were established prospectively at the beginning of the year and were not adjusted to reflect actual time and effort during the year. These employees do not complete detailed timesheets; therefore, there is no after‑the‑fact documentation to support the accuracy of payroll costs charged to Federal programs. Cause Management believed that, because the employees work consistent hours on the same programs each week and supervisory knowledge of attendance exists, maintaining detailed time and effort records was unnecessary. Effect Without contemporaneous, after the fact documentation of actual time spent on each Federal program, the organization cannot demonstrate that salary costs are accurately allocated, increasing the risk of unallowable costs being charged to the grants. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and has performed a time-study to support program allocations. The allocations have been implemented in 2025. Context The exception was isolated to four administrative employees. The maintenance employee maintained acceptable property specific timesheets and was not included in the exception population. Recommendation We recommend that the organization establish an after the fact time and activity reporting system that meets Uniform Guidance requirements and adjust payroll allocations at least quarterly to reflect actual effort expended. Information on universe and population size The universe and population consisted of 26 payroll periods. Sample size information A non‑statistical sample of 3 payroll periods were selected for testing.  Identification as a repeat finding This is a repeat finding. Criteria 2 CFR §200.430(i) requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed and that are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. HUD guidance reiterates the requirement for after the fact time and activity documentation to support payroll allocations to grants. Statement of condition Payroll allocations for four employees were established prospectively at the beginning of the year and were not adjusted to reflect actual time and effort during the year. These employees do not complete detailed timesheets; therefore, there is no after‑the‑fact documentation to support the accuracy of payroll costs charged to Federal programs. Cause Management believed that, because the employees work consistent hours on the same programs each week and supervisory knowledge of attendance exists, maintaining detailed time and effort records was unnecessary. Effect Without contemporaneous, after the fact documentation of actual time spent on each Federal program, the organization cannot demonstrate that salary costs are accurately allocated, increasing the risk of unallowable costs being charged to the grants. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and has performed a time-study to support program allocations. The allocations have been implemented in 2025. Context The exception was isolated to four administrative employees. The maintenance employee maintained acceptable property specific timesheets and was not included in the exception population. Recommendation We recommend that the organization establish an after the fact time and activity reporting system that meets Uniform Guidance requirements and adjust payroll allocations at least quarterly to reflect actual effort expended.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI222VO167 - 2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Housing Choice Voucher Cluster requires that units with failed inspections be reinspected within 30 days. Condition: During our testing, we noted that the entity did not have internal controls over reinspections to verify they were completed within 30 days. Questioned costs: None Context: During our testing we noted 1 out of 8 failed inspections was not reinspected within 30 days. The reinspection was done 32 days after the original inspection. Cause: The Authority did not have time to complete inspection within 30 days but did complete as soon as they were able to. Effect: Noncompliance with HUD requirements. Repeat Finding: No Recommendation: We recommend that Authority implement procedures to verify reinspections done within 30 days. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI222VO167 - 2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires time and effort documentation for all individuals whose time is coded to the federal grants. Condition: During our testing we noted that the organization is allocating payroll costs based on time allocation determined several years ago and did not have time and effort documentation to verify actual time spent agrees on federal program agrees to the allocation being used. Questioned costs: Unknown Context: Allocations of employee time to grants are set up at the beginning of the year and are not changed during the year. Organization has 4 employees who keep time sheet simply for tracking attendance and time off. These employees work the same hours and programs every week so detailed time sheet tracking is not considered necessary. Since they have small staff the bookkeeper who does the payroll and Executive Director know what hours are being worked and paid for as they would know if employee is absent. Maintenance person maintains timesheet listing what property work was performed at to code time to specific programs. Cause: The client has been using allocation determined several years ago since responsibilities of staff have not changed. Effect: Noncompliance with HUD requirements. Repeat Finding: No Recommendation: We recommend, the entity develop a method to track actual time spent on various programs to time allocated to federal award programs. Views of responsible officials: There is no disagreement with the audit finding.

Finding: 2022-001 ? Lack of Proper Review ? Suspension and Debarrment Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A, 2022 Award Period: December 10, 2021-September 30, 2023 Pass-Through Agency: Sawyer County Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Procurement standards requires that there is a policy in place and is expected to be followed to ensure entities are properly procuring goods and services and to ensure vendors and contractors are not suspended or debarred. Condition: During procurement and suspension and debarment testing, it was noted that the Authority could not provide proof of verification that vendor was not suspended or debarred. Questioned costs: None Context: The Authority reviewed the vendor before making payment to verify not suspended or debarred but there was no documentation for auditors to test. Cause: The Authority did not think to maintain documentation of the verification. Effect: Lack of proper documentation of controls over compliance with suspension and debarment requirements could result in paying suspended or debarred vendors. This could ultimately result in questioned costs. Repeat Finding: No Recommendation: We recommend that the Authority implement a policy to maintain supporting documentation for suspension and debarment verification. Views of responsible officials: There is no disagreement with the audit finding.