KANSAS CITY KANSAS HOUSING AUTHORITYLocal Government

2024-001 – SPECIAL TESTS AND PROVISIONS: PUBLIC HOUSING WAITING LIST Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development CFDA #: 14.850 – Public and Indian Housing Program CRITERIA The PHA must establish and adopt written policies for admission of tenants. The PHA tenant selection policies must include requirements for applications and waiting lists, description of the policies for selection of applicants from the waiting lists, and policies for verification and documentation of information relevant to acceptance or rejections of an applicant (24 CFR sections 960.202 through 960.206). CONDITION The Authority was not able to provide documentation of the tenant selection from the waiting list in 5 of the 25 files selected for testing. CAUSE There was an issue with the Authority’s software causing the failure of the documentation to be retained for the waiting list selections. EFFECT We could not determine if tenants were appropriately selected from the waiting list. QUESTIONED COSTS None identified. CONTEXT We selected a sample of 25 from a population of 232. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Authority ensure their software is retaining required tenant file documentation. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2023-001 – REPORTING Other Matter/Significant Deficiency U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund Program / #14.871 Housing Voucher Cluster CRITERIA Financial Reports (0MB No. 2535-0107) - Financial Assessment Sub- system, FASS-PH. The Uniform Financial Reporting Standards (24 CFR section 5.801) require PHAs to submit timely GAAP-based unaudited and audited financial information electronically to HUD. The FASSPH system is one of HUD's main monitoring and oversight systems for the Public and Indian Housing Program. CONDITION The unaudited FDS was required to be submitted to HUD by June 15, 2023. The Authority submitted the FDS on July 1, 2023. CAUSE The Authority’s internal control processes were not sufficient to ensure the timely filing of the unaudited FDS. EFFECT As a result of not submitting the FDS timely, HUD was limited in its ability to conduct monitoring and oversight of federal programs. QUESTIONED COSTS None identified. CONTEXT The Authority submits the unaudited FDS annually. Our testing of the reporting requirement was limited to the single occurrence of the annual filing. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority ensure its year-end closing process is sufficient to allow for the timely filing of the unaudited FDS. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Finding No. 2022-001: Significant Deficiency in Internal Control over Compliance Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Housing Voucher Cluster Federal Assistance Listing Number: 14.871 Compliance Requirement: Eligibility Criteria: 2 CFR Section 5.508 states that in order to be eligible for federally assisted housing, each family member must provide evidence of U.S. citizenship or eligible immigration status. Condition: The Authority was unable to provide evidence of U.S. citizenship or eligible immigration status. Context: In a sample of 40 tenant files selected for eligiblity, we noted 1 of the tenants did not contain documentation of U.S. citizenship or eligible immigration status. Cause: The Authority's internal controls in place did not identify the missing documentation. Effect: The Authority does not have sufficient evidence of U.S. citizenship or eligible immigration status. Questioned Costs: None. Repeat Finding: This is not a repeat finding. Recommendation: The Authority should review and enhance its internal controls to ensure that they are sufficient to ensure all required documentation is obtained and retained in the tenant files. Views of Responsible Officials: Management acknowledges the finding and going forward, management will review the completeness of the eligibility documentation for all Housing Choice Voucher participants when they are enrolled in the program and continue review during annual review. Management will also ensure the documents are maintained for a period of three years after the participant exits from the program.

Finding 2019-001: Cash Management (Significant Deficiency; Noncompliance) Federal Program: CFDA 14.872, Public Housing Capital Fund Program Criteria: In accordance with 2 CFR Subpart K, Cash Management, the Authority is required, under the reimbursement payment method, to make payments to vendors and contractors prior to requesting reimbursement from HUD via eLOCCS. Condition: The Authority reflected a net payable of $68,218 due HUD (payable of $148,154 net of receivable of $79,936), which was a result of funds drawn in excess of costs incurred in the Capital Fund Program. Context: A reconciliation of cash draws through the HUD eLOCCS system identified draws in excess of costs incurred for the Capital Fund Program. Effect: Drawing funds prior to making payments to vendors can result in a decrease in funding from HUD. Cause: Redistribution of funds due to CFP budget revisions after disbursements had been made, involvement of multiple staff and lack of reconciliations contributed to the unreconciled differences. Questioned Costs: $148,154 Auditor Recommendation: We recommend that the Authority review its process for determining costs incurred for reimbursement and streamline the process. The calculation should be reviewed before funds are actually drawn. In addition, the Authority should consider providing additional training to the staff responsible for performing the capital fund draw process to ensure that all draws are supported by adequate documentation and are timed in accordance with HUD guidance. Views of Responsible Officials: The Authority will look for training opportunities to improve staff knowledge of the Capital Fund Program and to ensure staff understands documentation and timing requirements. Monthly the Capital Fund Program records will be reconciled to ensure any discrepancies are detected and resolved timely

Finding 2019-001: Cash Management (Significant Deficiency; Noncompliance) Federal Program: CFDA 14.872, Public Housing Capital Fund Program Criteria: In accordance with 2 CFR Subpart K, Cash Management, the Authority is required, under the reimbursement payment method, to make payments to vendors and contractors prior to requesting reimbursement from HUD via eLOCCS. Condition: The Authority reflected a net payable of $68,218 due HUD (payable of $148,154 net of receivable of $79,936), which was a result of funds drawn in excess of costs incurred in the Capital Fund Program. Context: A reconciliation of cash draws through the HUD eLOCCS system identified draws in excess of costs incurred for the Capital Fund Program. Effect: Drawing funds prior to making payments to vendors can result in a decrease in funding from HUD. Cause: Redistribution of funds due to CFP budget revisions after disbursements had been made, involvement of multiple staff and lack of reconciliations contributed to the unreconciled differences. Questioned Costs: $148,154 Auditor Recommendation: We recommend that the Authority review its process for determining costs incurred for reimbursement and streamline the process. The calculation should be reviewed before funds are actually drawn. In addition, the Authority should consider providing additional training to the staff responsible for performing the capital fund draw process to ensure that all draws are supported by adequate documentation and are timed in accordance with HUD guidance. Views of Responsible Officials: The Authority will look for training opportunities to improve staff knowledge of the Capital Fund Program and to ensure staff understands documentation and timing requirements. Monthly the Capital Fund Program records will be reconciled to ensure any discrepancies are detected and resolved timely

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