City of West Allis

2024 – 001: Eligibility Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding:  Significant Deficiency in Internal Control over Compliance  Other Matters Criteria or specific requirement: 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). Condition: During our testing, we noted the City did not complete the Enterprise Income Verification (EIV) in accordance with the stated criteria. Questioned Costs: Known - Undeterminable| Likely - Undeterminable Context: From a sample of forty (40) program participant files selected for testing, two (2) files did not maintain evidence of completion of income verification in accordance with the stated criteria. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City’s system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition selection of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the stated criteria. Repeat Finding: Yes; 2023-001 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding.

PHA staff understand that income verification is essential to ensure that only eligible participants are provided with housing assistance benefits. The housing division has conducted a thorough review of their procedures and upgraded their internal Standard Operating Procedure documents to include detailed step-by-step instructions designed to ensure compliance with EIV requirements. Additionally, staff have been in contact with their software provider about system enhancements such as the software producing a warning/error if an employee attempts to process an EIV reexamination without updating the EIV date. Such enhancements would further help to ensure compliance with federal program requirements. Staff have also been attending training to ensure sufficient knowledge of program EIV requirements. Staff believe these efforts should address this concern.

2023-001

2024 – 002: Reasonable Rent Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2024 Award Period: January 1, 2024 – December 31, 2024 Type of Finding:  Significant Deficiency in Internal Control over Compliance  Other Matters Criteria or specific requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHS must maintain records to document the bases for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of rent reasonableness schedule as stated in the criteria section of this finding. Questioned Costs: Known - None | Likely - Undeterminable Context: From a sample of sixty (60) program participant files selected for testing, two (2) tenant files did not include documentation of performance of rent reasonableness prior to the lease date. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: Yes; 2023-002 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding.

The housing division has conducted a thorough review of their procedures and upgraded their internal Standard Operating Procedure documents to include detailed step-by-step instructions designed to ensure compliance with rent reasonableness requirements. Additionally, the PHA contracts the services of McCright & Associates LLC, a reputable HQS servicing company, to assist with rent reasonableness requirements. McCright now conducts all rent reasonableness comparables for all new units and staff confirm that a copy is stored in the participant file. Staff believe that with the implementation of these procedures appropriate steps have been taken to address this concern

2023-002

2023 – 001: Eligibility Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding:  Significant Deficiency in Internal Control over Compliance  Other Matters Criteria or specific requirement: 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). Condition: During our testing, we noted the City did not complete the Enterprise Income Verification (EIV) in accordance with the stated criteria. Questioned Costs: Known - Undeterminable| Likely - Undeterminable Context: From a sample of sixty (60) program participant files selected for testing, one (1) file failed to maintain documentation of compliance with the requirements as stated in the criteria section of this finding. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City’s system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition selection of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the stated criteria. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding.

U.S. Department of Housing and Urban Development 2023-001 Eligibility - Housing Choice Voucher Program – Assistance Listing No. 14.871 Recommendation: The City should review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with Enterprise income Verification (EIV) eligibility requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: PHA staff understand that income verification is essential to ensuring that only eligible participants are provided housing assistance benefits. In late 2023 they implemented a new file review procedure where the Community Development Senior Planner reviews all files processed by operational housing staff as a matter of quality control. In addition, the protocol for PHA quality control includes following the Section Eight Management Assessment Program (SEMAP) indicator iv. Accurate verification of family income by ensuring EIV Reports validate family income 120 days of submission of a new admission or reexamination and maintain copies of the report in the tenant file resolving any discrepancies of the family within 60 days of the EIV Report. The one instance of non-compliance found during the 2023 audit occurred prior to the implementation of this new procedure so staff believe that appropriate steps have been taken to address this concern. Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: The City believes the necessary corrective actions have been taken as of August 2024.

2023 – 002: Reasonable Rent Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2023 Award Period: January 1, 2023 – December 31, 2023 Type of Finding:  Material Weakness in Internal Control over Compliance  Material Noncompliance Criteria or specific requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHS must maintain records to document the bases for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of rent reasonableness schedule as stated in the criteria section of this finding. Questioned Costs: Known - None | Likely - Undeterminable Context: From a sample of sixty (60) program participant files selected for testing, seven (7) tenant files did not include documentation of performance of rent reasonableness prior to the lease date. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: Yes; 2022-002 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding.

U.S. Department of Housing and Urban Development 2023-002 Reasonable Rent - Housing Choice Voucher Program – Assistance Listing No. 14.871 Recommendation: The City should review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with documentation requirements for rent reasonableness determinations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: With similar prior audit findings, the PHA has been frustrated that their software retained evidence that rent reasonableness determinations were conducted as required, but unfortunately the software did not retain sufficient details for the auditors to conduct the required review. During 2023 the PHA updated their procedures to require that staff manually save (print-screen) the previous rent reasonableness details to the tenant file in the software before they conduct the new rent reasonableness determination. Additionally, the PHA opted to contract the services of McCright & Associates LLC, which is a HQS servicing company that provides housing quality inspections for initial, and annual, and special inspections. In particular, SEMAP indicator ii. Sound determination of reasonable rent for each unit leased is ensured by McCright & Associates Rent Reasonableness report, which uses a property appraisal model comparing the subject property to three comparable properties. This data is provided to the PHA on each unit inspected. Housing staff downloads, prints, and uploads the rent reasonableness report to each tenant file to remain compliant with PHA specific protocols. The instances of non-compliance found during the 2023 audit occurred prior to the implementation of these new procedure so staff believe that appropriate steps have been taken to address this concern Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: The City believes the necessary corrective actions have been taken as of August 2024.

2022-002

2022 ? 001: Housing Quality Standards (HQS) Enforcement Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2022 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: For units under HAP contract that fail to meet (Housing Quality Standards (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 within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within 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. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During our testing, we noted the City failed to comply with the requirements of the HQS enforcement as stated in the criteria section of this finding. Questioned Costs: Known ? Undeterminable; Likely - Undeterminable Context: From a sample of nine (9) program participant files selected for testing and three (3) program participant files where the unit failed inspection and the HAP was not appropriately abated. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the 24 CFR sections 982.158(d) and 982.404 related to the HQS enforcement. Repeat Finding: Yes; 2021-002 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of HQS enforcement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The PHA is currently finalizing a contract with a 3rd party contractor to perform the required HQS inspections. They anticipate that outsourcing the inspection work will lessen the workload on PHA staff to allow program staff to focus their efforts on improving overall program compliance, including HQS enforcement procedures. As the contract arrangement is rolled out staff will review procedures between inspectors and PHA staff to ensure proper communication and clear procedures are in place as they relate to enforcement actions. PHA staff also will implement a new standard procedure in which the Housing Coordinator will check a list of units with failed or incomplete inspection records against the payment batch report prior to sending the batch to Finance to issue the HAP payments. PHA Supervisory Staff have also requested more detailed information on the audit results to help them further analyze the 3 specific cases where customers were issued HAP payments despite a failed inspection. This will help supervisory staff conduct a more thorough review and consider additional procedural changes. Additionally, the Finance Department suggests the PHA engage its software vendor or a peer agency to review functionality in the software to determine whether additional features could be employed in the software to prevent a HAP payment on a unit with a failed inspection, for example. Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: 3/31/2024

2021-002

2022 ? 002: Reasonable Rent Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2022 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHS must maintain records to document the bases for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of rent reasonableness schedule as stated in the criteria section of this finding. Questioned Costs: Known - Undeterminable; Likely - Undeterminable Context: From a sample of sixty (60) program participant files selected for testing, four (4) tenant files did not include documentation of performance of rent reasonableness prior to the lease date; one (1) tenant file had rent reasonableness documented more than twelve months prior to the effective date; two (2) files did not have documentation of rent reasonableness being completed; and eleven (11) tenant files did not have documentation maintained of the completion of the fiscal year 2022 rent reasonableness as the 2023 process had already been performed. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: Yes; 2021-003 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: PHA staff noted that the current process of finding comparable data for rent reasonableness comparisons is challenging and obtaining accurate, up-todate data has been a struggle. As part of the RFP process for inspection services, staff noted that McCright offers a process that can assist in accessing data and making the rent reasonableness comparisons PHA staff will also pursue options available under its contract with McCright, data feeds that could work within its existing software, and any other options in use at peer agencies to determine the best specific path forward to ensuring compliance with rent reasonableness requirements. PHA Supervisory Staff have also requested more detailed information on the audit results to help them further analyze the specific rent reasonableness cases where documentation and performance errors were made which led to this finding. This will help supervisory staff conduct a more thorough review and consider additional procedural changes. Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: 3/31/2024

2021-003

2022 ? 003: Income Verification Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2021 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: ? Internal Control, Significant Deficiency ? Other Matters Criteria or specific requirement: Income reported on the tenant assistance application was verified by the leasing specialist by obtaining 3rd party verification of annual income. (3rd party verification includes direct confirmation from an employer, at least 3 paystubs, EIV report (required for 10/09 and later), SS award letter, printouts from Dept of Social Services for TANF, child support, etc.) (24 CFR 985.516). Condition: During our testing, we noted the City failed to comply with the requirements to document completion of the stated in the criteria section of this finding. Questioned Costs: Known - None; Likely - Undeterminable Context: From a sample of forty (40) program participant files selected for testing, two (2) files did not maintain evidence of completion of income verification in accordance with the stated criteria. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Explanation of disagreement with audit finding: There is no disagreement with the audit finding Action taken in response to finding: PHA supervisory staff will review the detailed income verification procedures that are in place, including documentation procedures. Supervisory staff have also requested more detailed information on the audit results to help them review the specific instances that led to this finding so specific procedural changes can be considered and implemented. Staff understand that income verification is essential to ensuring that only eligible participants are provided HAP benefits. Results of the PHA?s internal procedural review will be submitted to the Finance Department for additional review to ensure proper procedural controls are in place. Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: 3/31/2024

2022 ? 004: Housing Quality (HQS) Standards Inspection Annual Inspections Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2022 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Internal Control, Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control reinspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of the annual HQS inspection as stated in the criteria section of this finding. Questioned Costs: Known - None; Likely - Undeterminable Context: From a sample of sixty (60) program participant files selected for testing, three (3) files failed to maintain documentation of compliance with the requirements of annual HQS inspection reinspection requirements as stated in the criteria section of this finding. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the (24 CFR sections 982.158(d) and 982.405(b)) related to the annual HQS inspection. Repeat Finding: Yes; 2021-005 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the annual HQS inspection. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: As mentioned previously, the PHA is currently finalizing a contract with a 3rd party contractor to perform the required HQS inspections. They anticipate that outsourcing the inspection work will lessen the workload on PHA staff to allow for program staff to focus their efforts on improving overall program compliance, including HQS inspection procedures. As the contract arrangement is rolled out staff will review procedures between inspectors and PHA staff to ensure proper communication and clear procedures are in place to ensure all required inspections are completed. The Housing Coordinator or other PHA staff should review summary reports of renewals processed each month and compare them to inspections processed each month to ensure all necessary inspections are completed. PHA Supervisory Staff have also requested more detailed information on the audit results to help them further analyze the specific cases that did not have a documented or completed annual inspection. This will help supervisory staff conduct a more thorough review and consider additional procedural changes. Additionally, the Finance Department suggests the PHA engage its software vendor or a peer agency to review functionality in the software to determine whether additional features could be employed in the software to prevent a HAP payment on a unit with an incomplete inspection, for example. Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: 3/31/2024

2021-005

2022 ? 005: Reasonable Rent for New Tenants Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2022 Award Period: January 1, 2022 ? December 31, 2022 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: Verified rent reasonableness determination was completed prior to the rent effective date (date agreement signed, not lease start date). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of rent reasonableness schedule as stated in the criteria section of this finding. Questioned Costs: Known - None; Likely - Undeterminable Context: From a sample of forty (40) program participant files selected for testing and eight (8) tenant files did not have documentation maintained of the completion of the fiscal year 2022 rent reasonableness as the 2023 process had already been performed. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

Housing Choice Voucher Program ? Assistance Listing No. 14.871 We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: PHA staff will review its current procedures for completing rent reasonableness requirements. As noted above, they will pursue options available under their contract with McCright, data feeds that could work within their existing software, and any other options in use at peer agencies to determine the best specific path forward to ensuring compliance with rent reasonableness requirements. PHA Supervisory Staff have also requested more detailed information on the audit results to help them further analyze the specific rent reasonableness cases where documentation and performance errors were made which led to this finding. This will help supervisory staff conduct a more thorough review and consider additional procedural changes. Also, as noted above the Finance Department suggests the PHA engage its software vendor or a peer agency to review functionality in the software to determine whether additional features could be employed in the software to prevent a HAP payment on a unit where rent reasonableness has not been completed yet. Name(s) of the contact person(s) responsible for corrective action: Steve Schaer Planned completion date for corrective action plan: 3/31/2024

2021 ? 002: Housing Quality Standards (HQS) Enforcement Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2021 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: For units under HAP contract that fail to meet (Housing Quality Standards (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 within a specified PHA-approved extension. If the owner does not correct the cited HQS deficiencies within 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. The owner is not responsible for a breach of HQS as a result of the family?s failure to pay for utilities for which the family is responsible under the lease or for tenant damage. For family-caused defects, if the family does not correct the cited HQS deficiencies within the specified correction period, the PHA must take prompt and vigorous action to enforce the family obligations (24 CFR sections 982.158(d) and 982.404). Condition: During our testing, we noted the City failed to comply with the requirements of the HQS enforcement as stated in the criteria section of this finding. Questioned Costs: Known - Undeterminable Likely - Undeterminable Context: From a sample of eight (8) program participant files selected for testing, two (2) tenant files noted they filed HQS and no letter was sent to the tenant or re-inspection was completed; one (1) tenant file noted the unit failed inspection and no evidence of re-inspection and resolution of the matter was documented; and three (3) files noted other deficiencies for which the reinspection and documentation of remediation was not performed in accordance with the stated criteria. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the 24 CFR sections 982.158(d) and 982.404 related to the HQS enforcement. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of HQS enforcement. Views of responsible officials: There is no disagreement with the audit finding.

U.S. Department of Housing and Urban Development 2021-002 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Summary of Finding: Non-compliance with required follow up/enforcement actions for Housing Quality Standards (HQS) violations noted during inspections. Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of HQS enforcement. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: PHA staff has reviewed the Administrative plan for the Voucher Program and will update/train staff with respect to HQS standards, inspection and reinspection (and thereby providing required documentation of inspection, reinspection and performance of remediation). We are retraining staff to follow HUD regulations. Staff inspection assignments will be coordinated to avoid scheduling conflicts and proper communications and document retention. Name(s) of the contact person(s) responsible for corrective action: Steven Schaer Planned completion date for corrective action plan: 3/31/2023

2021 ? 003: Rent Reasonableness Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2021 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: The PHA must determine that the rent to owner is reasonable at the time of initial leasing. Also, the PHA must determine reasonable rent during the term of the contract (a) before any increase in the rent to owner, and (b) at the HAP contract anniversary if there is a 5 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHS must maintain records to document the bases for the determination that rent to owner is a reasonable rent (initially and during the term of the HAP contract) (24 CFR sections 982.4, 982.54(d)(15), 982.158(f)(7), and 982.507). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of rent reasonableness schedule as stated in the criteria section of this finding. Questioned Costs: Known - None Likely - Undeterminable Context: From a sample of twenty-two (22) program participant files selected for testing, fourteen (14) tenant files did not include documentation of performance of rent reasonableness prior to the lease date and six (6) tenant files had rent amounts in excess of the HUD Fair Market Rent Guidelines. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

2021-003 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Summary of Finding: Non-compliance with required Rent Reasonableness determination and/or related documentation requirements. Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: PHA staff has reviewed for the rent reasonable we are aware of what is needed to be compliant. One issue we encountered in 2021 was staff transition, and as a result, the rent reasonableness data was not compiled in a timely manner. We are fully staffed now, and corrective training has been implemented to collect and accurately apply the rent reasonable test per HUD requirements. Name(s) of the contact person(s) responsible for corrective action: Steven Schaer Planned completion date for corrective action plan: 3/31/2023

2021 ? 004: Maintenance of Release Forms Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2021 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: ? Internal Control, Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Most PHAs devise their own application forms that are filled out by the PHA staff during an interview with the tenant. The head of the household signs (a) one or more release forms to allow the PHA to obtain information from third parties; (b) a federally prescribed general release form for employment information; and (c) a privacy notice. Under some circumstances, other members of the family are required to sign these forms (24 CFR sections 5.212 and 5.230). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements as stated in the criteria section of this finding. Questioned Costs: Known - None Likely - Undeterminable Context: From a sample of forty (40) program participant files selected for testing, three (3) files did not the required releases in accordance with the stated criteria. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the stated criteria. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Views of responsible officials: There is no disagreement with the audit finding.

2021-004 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Summary of Finding: Failure to obtain authorized release forms and a privacy notice during the application process to allow the PHA to obtain information from third parties, including employment information. Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the stated criteria. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: This finding is being discussed with PHA staff and additional training is a priority among PHA team members. Refresher training will avoid non-compliance (obtaining 3rd party releases and general release forms from employers). The PHA realizes that it cannot request releases without the applicant?s consent. Name(s) of the contact person(s) responsible for corrective action: Steven Schaer Planned completion date for corrective action plan: 3/31/2023

2021 ? 005: Housing Quality Standards (HQS) Annual Inspections Federal Agency: Housing Choice Voucher Program Federal Program Name: U.S. Department of Housing and Urban Development Assistance Listing Number: 14.871 Federal Award Identification Number and Year: WI201VO2021 Award Period: January 1, 2021 ? December 31, 2021 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance Criteria or specific requirement: The PHA must inspect the unit leased to a family at least annually to determine if the unit meets 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)). Condition: During our testing, we noted the City failed to maintain documentation of compliance with the requirements of the annual HQS inspection as stated in the criteria section of this finding. Questioned Costs: Known - None Likely - Undeterminable Context: From a sample of forty (40) program participant files selected for testing, four (4) files failed to maintain documentation of compliance with the requirements of annual HQS inspection reinspection requirements as stated in the criteria section of this finding. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City's system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of the (24 CFR sections 982.158(d) and 982.405(b)) related to the annual HQS inspection. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the annual HQS inspection. Views of responsible officials: There is no disagreement with the audit finding.

2021-005 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Summary of Finding: Compliance issue regarding annual inspections-missing documentation indicates either inspections were not completed, or documentation was not kept. Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements of the annual HQS inspection. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Documentation is an understood requirement. Management has reviewed the issue to determine instances of occurrence as without compliance documents HAP payments should not be issued. Training staff to follow HUD regulations is being prioritized. Name(s) of the contact person(s) responsible for corrective action: Steven Schaer Planned completion date for corrective action plan: 3/31/2023

2020-001: Third Party Asset Verification Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Choice Voucher Program Cluster CFDA No: 14.871 Compliance Requirement: Eligibility Award Period: January 1, 2020 ? December 31, 2020 Type of Finding: ? Internal Control, Material Weakness in Internal Control over Compliance ? Material Noncompliance (Modified Opinion) Criteria or specific requirement: Assets reported on the tenant assistance application were verified by the leasing specialist by obtaining 3rd party verification of assets. If the tenant listed bank accounts, the PHA must obtain account balances from the bank or copies of bank statements. If the tenant receives SS income or wages, look at these forms to see if there is any indication of direct deposit. If so, the PHA should have gotten bank statements. (24 CFR 985.516). Condition: During our testing, we noted the City failed to maintain documentation with the requirements to obtain 3rd party verification as stated in the criteria section of this finding. Questioned Costs: Known ? None Context: From a statistically valid sample of forty (40) program participant files selected for testing, eighteen (18) files failed to maintain documentation of eligibility with the requirement to obtain 3rd party verification of assets as stated in the criteria section of this finding. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: The City?s system of internal controls included in the policies and procedures failed to identify the noncompliance as described in the condition section of this finding. Effect: The failure of the internal controls has resulted in noncompliance with the requirements of 24 CFR 985.516 as stated in the criteria section of this finding. Repeat Finding: No Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements as stated in the criteria section of this finding. Views of Responsible Officials: There is no disagreement with the audit finding.

U.S. Department of Housing and Urban Development 2020-001 Housing Choice Voucher Program ? Assistance Listing No. 14.871 Recommendation: We recommend that the City review its system of internal control related to the policies and procedures in place to mitigate the risk of noncompliance with the requirements as stated in the criteria section of this finding. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Prior to notification of this audit finding in March 2022, the Housing Office experienced staffing turnover and other organizational changes, which included key program staff, and a departmental reorganization that changed program supervision responsibilities. After efforts to stabilize the staffing interruptions, Housing Staff took corrective action in early 2021 to cross-train and work toward improvement and consistency as it relates specifically to verifying and maintaining participant eligibility requirements. Housing staff indicated such efforts were completed by July 2021. A more complete review of the policies and procedures and overall system of internal control for the Housing Choice Voucher program is likely needed due to the recent staffing and organizational changes. It is anticipated that this review will be completed during 2022. Name(s) of the contact person(s) responsible for corrective action: Steven Schaer Planned completion date for corrective action plan: 9/30/2022