EDLERLY HOUSING CORPORATION OF CLAY COUNTY HUD PROJECT #092-35748-NP-8

Special Tests and Provisions: Housing Quality Standards – Significant Deficiency Federal Program Project Based Rental Assistance 14.195 Grant Award No. MN460010054 Federal Award Year 2024 Criteria The PHA or owner must provide housing that is decent, safe, and sanitary. To achieve this end, the PHA or owner must perform housing quality inspections at the time of initial occupancy and at least annually thereafter to ensure that the units are decent, safe, and sanitary (24 CFR sections 880.612, 881.601, 882.516, 882.808(n), 883.701, 884.217, 886.123, and 886.323). Condition During our review of six tenant files, we noted the Corporation did not follow up on one failed inspection in a timely manner. It was noted as of the date of the auditor’s testing, no follow up or corrective action had occurred on the failed inspection. Context We reviewed a sample of 6 of the Corporation's 52 outstanding tenant files for Housing Quality Standards requirements. Questioned Costs N/A Effect Inspected units may not have met Housing Quality Standards, which could result in housing assistance payments being made for units that were not up to the Housing Quality Standards. Cause The Corporation noted a change in software caused confusion as to whether the failed inspection had been corrected or not. Repeat Finding This is a repeat finding of 2023-001. Recommendation We recommend the Corporation review its quality control process over inspections. Views of Responsible Officials The Corporation is aware of the issue and has taken subsequent steps to ensure compliance with the requirement.

Contact Person Dara Lee, Executive Director of Clay County HRA (Authorized Representative and Agent) Corrective Action Plan The Corporation is aware of the issue and has taken subsequent steps to ensure compliance with the requirement. Planned Completed Date for CAP Immediately

2023-001

Special Tests and Provisions: Vacant Units – Significant Deficiency Federal Program Project Based Rental Assistance 14.195 Grant Award No. MN460010054 Federal Award Year 2024 Criteria Perform procedures to obtain an understanding of internal control sufficient to plan the audit to support a low assessed level of control risk for the vacant unit requirements. Condition During our review of the documents sent to HUD monthly, it was noted that no signature was included on the document to signify who performed the procedures. The Corporations control procedures note this as a control process. This document contained tenant HAP reimbursement request information as well as vacant unit information. Context We reviewed 2 months of documents submitted to HUD for tenant HAP reimbursements and vacancy data for proper control procedures. Questioned Costs N/A Effect The Corporation may be providing incorrect information to HUD for reimbursements. Cause The Corporation noted a change in employees performing the tasks as well as oversight errors. Repeat Finding This is not a repeat finding. Recommendation We recommend the Corporation review its quality control process over reimbursement requests and vacant unit reporting to HUD. Views of Responsible Officials The Corporation is aware of the issue and has taken subsequent steps to ensure internal procedures are followed as established.

Contact Person Dara Lee, Executive Director of Clay County HRA (Authorized Representative and Agent) Corrective Action Plan The Corporation is aware of the issue and has taken subsequent steps to ensure internal procedures are followed as established. Planned Completed Date for CAP Immediately

2023-001 Special Tests and Provisions: Housing Quality Standards – Significant Deficiency Federal Program U.S Department of Housing and Urban Development AL 14.182 Grant Award No. MN460010054 Criteria The PHA or owner must provide housing that is decent, safe, and sanitary. To achieve this end, the PHA or owner must perform housing quality inspections at the time of initial occupancy and at least annually thereafter to ensure that the units are decent, safe, and sanitary (24 CFR sections 880.612, 881.601, 882.516, 882.808(n), 883.701, 884.217, 886.123, and 886.323). Condition During our review of six tenant files, we noted the Corporation did not retain documentation for an annual inspection in one of the tenant files selected. Context We reviewed a sample of six of the Corporation's 58 outstanding tenant files for Housing Quality Standard compliance requirements. Questioned Costs N/A Effect Inspected units may not have met Housing Quality Standards which could result in housing assistance payments being made for units that were not up to the Housing Quality Standards. Cause The Corporation failed to retain documentation within a tenant file to support the performance of an annual inspection. Recommendation We recommend the Corporation review its quality control process over tenant files. Views of Responsible Officials The Corporation is aware of the issue and has taken subsequent steps to ensure compliance with the requirement.

Contact Person Dara Lee, Executive Director of Clay County HRA (Authorized Representative and Agent) Corrective Action Plan Error occurred due to lack of oversight in review of tenant files. Planned Completed Date for CAP Immediately

2020-001 Eligibility ? Significant Deficiency Federal Program U.S Department of Housing and Urban Development CFDA 14.182 Criteria Eligibility compliance requires the Corporation to obtain and document in the family file third party verification of: (1) reported family annual income; (2) 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 for both family income examinations and reexaminations. Condition During our review of seven files, we found one file with an error in the annual income calculation. Context We reviewed a sample of seven of the 64 Corporation?s outstanding tenant files for eligibility requirements. Questioned Costs Immaterial Effect Annual income amount for the family reported by the Corporation was understated, resulting in an overpayment of the Housing Assistance Payments (HAP). Cause In one instance, the Corporation did not annualize a monthly grant supplemented to the tenant. Recommendation We recommend that the tenant file review procedures be established and ensure all required documentation is available to support the tenant?s income and eligibility. Views of Responsible Officials We are aware of the issue and have taken subsequent steps to ensure compliance with this requirement.

Corrective Action Plan ? December 31, 2020 2020-001 Contact Person Dara Lee, Executive Director of Clay County HRA (Authorized Representative and Agent) Corrective Action Plan Error occurred due to lack of oversight in review of calculation of annual income. We continue to confirm that all rent calculations are matched to verification of income documentation in the tenant files. Planned Completion Date for CAP Immediately