Grinnell Low Rent Housing Authority

Finding 2025-005: HUD Depository Agreement Housing Choice Voucher Program – 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2024-003 Criteria: The Authority is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: In the prior years, the Authority opened up new bank accounts and did not obtain the required depository agreement. This was reported as a finding in the prior year. The bank in question indicated it will not sign the depository agreement. During the current year, the Authority opened up two new accounts at a different bank that did sign the agreement but still had funds at the bank that would not sign the agreement so the finding remains. The Authority indicated in the Summary Schedule of Prior Audit Findings that the finding was corrected and that was not accurate. Cause: The Authority did not take appropriate action to correct the prior year finding. Effect or Potential Effect: The Authority was in noncompliance with HUD’s requirement to have proper depository agreements. Recommendation: The Authority must move its funds to a bank that will sign the HUD depository agreement. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.

Finding 2025-005: HUD Depository Agreement Housing Choice Voucher Program 14.871 Material Weakness/Noncompliance – Special Tests and Provisions I agree with this finding. Due to unforeseen circumstances a new financial institute will sign a new GDA. Once this is complete documentation for HUD funds to be deposited into the account will be completed and all other accounts will be closed. Estimated date of completion – December 31, 2025.

Finding 2025-006: HQS Quality Control Inspections Housing Choice Voucher, 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2024-004 Criteria: 24 CFR §982.405 states the PHA must conduct supervisory qualify control HQS inspections. Condition: The Authority did not conduct and document any quality control inspections during the year. Cause: The Authority did not have procedures in place to perform the quality control inspections.. Effect or Potential Effect: The Authority did not comply with the requirements of 24 CFR §982.405. Recommendation: The Authority should review the requirements of 24 CFR §982.405 and establish a system of where HQS inspections have a quality control sampling during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2025-006: HQS Quality Control Inspections Housing Choice Voucher, 14.871 Material Weakness/Noncompliance Special Test and Provisions Repeat Finding 2024-004 I agree with this finding. A system is now in place and the first round of HQS Inspections were already completed for the 2025-2026 audit timeframe. - Completed

Finding 2025-007: Utility Allowances Housing Choice Voucher, 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2024-005 Criteria: The Authority must maintain an up-to-date utility allowance schedule. The Authority must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517). Condition: The Authority had not updated utility rates since the April 1, 2021 effective date schedules. Cause: It was a finding in the prior year that the Authority did not update the utility allowances. The Authority contacted a company to perform the analysis but the Authority felt it was too expensive and then failed to calculate the rates itself. The Authority then contacted another company but the process has not yet been completed. Effect or Potential Effect: The Authority did not comply with the requirements of 24 CFR §982.405. Recommendation: The Authority should review the requirements of 24 CFR §982.405 and establish a system of where the utility allowance is reviewed and documented during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2025-007: Utility Allowance Housing Choice Voucher, 14.871 Material Weakness/Noncompliance Special Test and Provisions Repeat Finding 2024-005 I agree with this finding. MRI Happy Software completed their Utility Allowance Survey and was submitted to the GLRHA on September 4, 2025. These documents are currently under review. Estimated date of completion on or before December 31, 2025.

Finding 2024-003: HUD Depository Agreement Housing Choice Voucher Program – 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2023-003 Criteria: The Authority is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: In the prior years, the Authority opened up new bank accounts and did not obtain the required depository agreement. This was reported as a finding in the prior year. The Authority’s current bank has indicated it will not sign the depository agreement and the Authority did not move the funds to a bank that would. Cause: The Authority did not take appropriate action to correct the prior year finding. Effect or Potential Effect: The Authority was in noncompliance with HUD’s requirement to have proper depository agreements. Recommendation: The Authority must move its funds to a bank that will sign the HUD depository agreement. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.

Finding 2024-003 HUD Depository Agreement Material Weakness/Non-Compliance – Special Tests and Provisions Repeat Finding 2023-003 I agree with finding Correcting this finding has been in development since the 2023 Audit. Notes on actions taken and the delay can be submitted upon request. As of August 2024, this correction is in its final steps. Once the fully completed Depository Agreement is received a copy will be submitted.

Finding 2024-004: HQS Quality Control Inspections Housing Choice Voucher, 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2023-004 Criteria: 24 CFR §982.405 states the PHA must conduct supervisory qualify control HQS inspections. Condition: The Authority did not conduct and document any quality control inspections during the year. Cause: The Executive Director was new and was not aware of how the quality control inspections were to be done. Effect or Potential Effect: The Authority did not comply with the requirements of 24 CFR §982.405. Recommendation: The Authority should review the requirements of 24 CFR §982.405 and establish a system of where HQS inspections have a quality control sampling during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2024-004 HQS Quality Control Inspections Housing Choice Voucher, 14.871 Material Weakness/Non-Compliance – Special Tests and Provisions Repeat Finding 2023-2024 I agree with these findings After the 2023 Finding it was the intention of the GLRHA to partner with the city Building Director to assist in follow up HQS Inspections. However, the city charges $50 per inspection in addition to the schedules of the director any HA staff are difficult to line up. I have requested a neighboring HA partner with this office to do the HQS Inspections, it is unknown at this time if this will be approved, or a charge associated with these inspections.

Finding 2024-005: Utility Allowances Housing Choice Voucher, 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2023-005 Criteria: The Authority must maintain an up-to-date utility allowance schedule. The Authority must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517). Condition: The Authority had not updated utility rates since the April 1, 2021 effective date schedules. Cause: It was a finding in the prior year that the Authority did not update the utility allowances. The Authority contacted a company to perform the analysis but the Authority felt it was too expensive and then failed to calculate the rates itself. Effect or Potential Effect: The Authority did not comply with the requirements of 24 CFR §982.405. Recommendation: The Authority should review the requirements of 24 CFR §982.405 and establish a system of where the utility allowance is reviewed and documented during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2024-005 Utility Allowance Material Weakness/Non-Compliance – Special Tests and Provisions I agree with finding I have reached out to several companies that provide this service; however, the cost has either been too high, or this HA is to small for them to provide this service. As a suggestion from another HA, I have again reached out to our software company requesting information or a quote. As of today’s date, I have made three requests with no answer back.

Finding 2023-003: Deposit Collateralization Housing Choice Voucher Program – 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Repeat Finding 2022-003 Criteria: The Agency is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: In the prior year, the Agency opened up new bank accounts and did not obtain the required depository agreement. This was reported as a finding in the prior year. The Agency’s current bank has indicated it will not sign the depository agreement and the Agency did not move the funds to a bank that would. Cause: The Agency did not take appropriate action to correct the prior year finding. Effect or Potential Effect: The Agency was in noncompliance with HUD’s requirement to have proper depository agreements. Recommendation: The Agency must move its funds to a bank that will sign the HUD depository agreement. View of the Responsible Officials of the Auditee: The auditee’s management agrees with the finding.

Finding 2023-003 Deposit Collateralization Material Weakness/Non-Compliance – Special Tests and Provisions Repeat Finding 2022-03 I agree with finding The requirement of the Depository Agreement was recently brought to my attention as I was not an employee at the time of the last Audit. This correction is in the process and will be put in place as soon as possible.

Finding 2023-004: HQS Quality Control Inspections Housing Choice Voucher, 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Criteria: 24 CFR §982.405 states the PHA must conduct supervisory qualify control HQS inspections. Condition: The Agency did not conduct and document any quality control inspections during the year. Cause: The Executive Director was new and was not aware of how the quality control inspections were to be done. Effect or Potential Effect: The Agency did not comply with the requirements of 24 CFR §982.405. Recommendation: The Agency should review the requirements of 24 CFR §982.405 and establish a system of where HQS inspections have a quality control sampling during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2023-004 Utility Allowance Material Weakness/Non-Compliance – Special Tests and Provisions I agree with finding I’ve met with City of Grinnell Building and Planning Director to make arrangements for himself and or his staff to perform HQS Quality Control Inspections for the Grinnell Low Rent Housing Authority.

Finding 2023-005: Utility Allowances Housing Choice Voucher, 14.871 Material Weakness/Noncompliance – Special Tests and Provisions Criteria: The Agency must maintain an up-to-date utility allowance schedule. The Agency must review utility rate data for each utility category each year and must adjust its utility allowance schedule if there has been a rate change of 10 percent or more for a utility category or fuel type since the last time the utility allowance schedule was revised (24 CFR section 982.517). Condition: The Agency had not updated utility rates since the April 1, 2021 effective date schedules. Cause: The Agency did not perform the utility allowance analysis for the April 1, 2022 utility rates and used the same rates as in the previous year. Effect or Potential Effect: The Agency did not comply with the requirements of 24 CFR §982.405. Recommendation: The Agency should review the requirements of 24 CFR §982.405 and establish a system of where the utility allowance is reviewed and documented during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2023-005 Deposit Collateralization Material Weakness/Non-Compliance – Special Tests and Provisions Utility Allowance Analysis was not included in my training for this position, I was underway of the need for an analysis until after the deadline has passed. I’ve reached out to our software company, however they were unwilling to complete this take due to the size of our HCV Program. I will be reaching out to companies requesting a proposal, if acceptable this will be completed.

Finding 2022-003: Deposit Collateralization Material Weakness/Noncompliance Housing Choice Voucher Program ? 14.871 Criteria: The Agency is required to enter into depository agreements with its financial institutions in the form required by HUD. The agreements serve as safeguards for federal funds and provide third-party rights to HUD. Condition: The Agency opened up new bank accounts during the year and did not obtain the required depository agreement. Cause: The Agency was unaware of the requirement. Effect or Potential Effect: The Agency was in noncompliance with HUD?s requirement to have proper depository agreements. Recommendation: The Agency should contact its financial institutions and provide them with the appropriate depository agreement to be signed. View of the Responsible Officials of the Auditee: The auditee?s management agrees with the finding.

Section III: Finding 2022 ? 003 Deposit Collateralization Agree with finding. The Authority will contact its financial institution and other area financial institutions to meet the proper depository requirements and have depository agreement signed by financial institution.

Criteria: 24 CFR ?982.405 states the PHA must conduct supervisory qualify control HQS inspections. Condition: The Agency did not conduct any quality control inspections during the year. Further, the Agency did not adopt any of the waivers available in Notice PIH 2020-05, 2020-13 or 2020-33 that would have waived this requirement. Cause: The Executive Director was new and was not aware of how the quality control inspections were to be done. Effect or Potential Effect: The Agency did not comply with the requirements of 24 CFR ?982.405. Recommendation: The Agency should review the requirements of 24 CFR ?982.405 and establish a system of where HQS inspections have a quality control sampling during each fiscal year. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.

Finding 2021-003: Agree with finding. Corrective Action completed September 30, 2021 Noncompliance?HQS Inspections Establish procedure to conduct quality control inspection sampling on a quarterly basis. Independent person with housing and inspection knowledge will be used. Minimum of 4 inspections will be conducted each quarter

Finding 2020-002: Internal Control Structure Housing Choice Voucher, 14.871 Material Weakness Repeat Finding 2019-002 Criteria: The Agency is responsible for establishing an effective internal control process to ensure the Agency complies with the requirements governing the Housing Choice Voucher program. Condition: The Agency has limited employees which makes it difficult for the Agency to have controls beyond the Executive Director's knowledge. As a result, we noted the following deficiencies related to the internal control components which are considered a material weakness: ? Control Activities ? The Agency only had the one staff so the Agency has no controls over compliance beyond the Executive Director's knowledge. ? Information and Communication ? Communication involves providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting The Agency had not formally documented the procedures as a reference point for employees to perform their duties. Further, internal control procedures should be documented so that the controls in place can be monitored. Cause: The Agency has limited resources and one staff. Effect or Potential Effect: The control deficiencies are deficiencies that result in more than a reasonable possibility that material noncompliance with program requirements could occur and not be prevented or detected Recommendation: As noted above, the Agency has limited resources and additional controls are not financially feasible in the hiring of additional staff. In addition, the Board of Commissioners is considered a governing Board and the Board performing management or day-to-day activities is not recommended based on our previous experience and is not intended to be a solution to this situation. The Agency is a small entity and the lack of segregation of duties is common among entities with minimal employees and should be recognized as such. However, it is not our intent to establish internal controls as the Agency's Board should make the final determination in the cost versus benefit. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding but can not reasonably adopt internal control procedures to correct the material weakness.

Finding 2020-002, Internal Control Structure The Authority agrees with the finding. This housing authority is a small agency with only one full time staff person. The Board of Commissioners consists of volunteers serving on the governing board; they take their responsibility seriously. A governing board does not conduct day-to-day management of an entity. The Commissioners also do not have the expertise nor time, to provide any necessary services to improve internal control. The Board agrees with that internal control is important. They also understand extensive internal control procedures just aren't feasible in a small agency. They have reviewed this issue and determined there are no additional, affordable procedures which can be reasonably done to limit these deficiencies.

Finding 2019-002: Internal Control Structure Housing Choice Voucher, 14.871 Material Weakness Repeat Finding Criteria: The Agency is responsible for establishing an effective internal control process to ensure the Agency complies with the requirements governing the Housing Choice Voucher program. Condition: The Agency has limited employees which makes it difficult for the Agency to have controls beyond the Executive Director's knowledge. As a result, we noted the following deficiencies related to the internal control components which are considered a material weakness: ? Control Activities ? The Agency only had the one staff so the Agency has no controls over compliance beyond the Executive Director's knowledge. ? Information and Communication ? Communication involves providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting The Agency had not formally documented the procedures as a reference point for employees to perform their duties. Further, internal control procedures should be documented so that the controls in place can be monitored. LOW RENT HOUSING AGENCY OF GRINNELL, IOWA SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT?D) March 31, 2019 Cause: The Agency has limited resources and one staff. Effect or Potential Effect: The control deficiencies are deficiencies that result in more than a reasonable possibility that material noncompliance with program requirements could occur and not be prevented or detected Recommendation: As noted above, the Agency has limited resources and additional controls are not financially feasible in the hiring of additional staff. In addition, the Board of Commissioners is considered a governing Board and the Board performing management or day-to-day activities is not recommended based on our previous experience and is not intended to be a solution to this situation. The Agency is a small entity and the lack of segregation of duties is common among entities with minimal employees and should be recognized as such. However, it is not our intent to establish internal controls as the Agency's Board should make the final determination in the cost versus benefit. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding but can not reasonably adopt internal control procedures to correct the material weakness.

Finding 2019-002, Internal Control Structure The Authority agrees with the finding. This housing authority is a small agency with only one full time staff person. The Board of Commissioners consists of volunteers serving on the governing board; they take their responsibility seriously. A governing board does not conduct day-to-day management of an entity. The Commissioners also do not have the expertise nor time, to provide any necessary services to improve internal control. The Board agrees with that internal control is important. They also understand extensive internal control procedures just aren't feasible in a small agency. They have reviewed this issue and determined there are no additional, affordable procedures which can be reasonably done to limit these deficiencies.