CITY OF WESTMINSTER, MARYLAND

Finding 2025-001 Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with Housing Quality Standards (HQS) Enforcement Requirement Repeat Findings: Yes, 2024-002 Criteria: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Public Housing Agency (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 (24 CFR sections 982.158(d) and 982.404). Condition and Context: We tested a sample of 25 HAP contracts and found 4 tenants where a HQS deficiency was not corrected within the required timeline after the inspection. The City’s Housing Authority had approved an extension for the issue to be corrected, but no documentation of this extension was kept in the tenant file. Cause: The City does not have a consistent process to document extensions for HQS deficiencies. Effect or Potential Effect: The City would fail to comply with the U.S. Department of Housing and Urban Development’s (HUD) HQS Enforcement guidelines. Questioned Costs: Unknown. Recommendation: We recommend that the City implement a policy to properly document HQS deficiency correction extensions within the tenant files. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Significant Deficiency in Internal Controls Over Financial Reporting – Payroll Repeat Findings: No Criteria: The City’s payroll department should ensure all timesheets are approved by appropriate supervisor before payroll is processed and disbursed. Supervisory approval of timesheets assists preventing errors, fraud, or misuse of resources. Condition and Context: We tested a population of 25 payroll transactions for the fiscal year ended June 30, 2024 over four pay periods and found that 3 employees selected for testing did not have properly approved timesheets. Effect or Potential Effect: The City could potentially allow for unapproved time to be paid to employees. Questioned Costs: Unknown. Recommendation: We recommend that the City review their internal controls processes and procedures over payroll processing to ensure all timesheets are properly approved before payroll is processed. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with Housing Quality Standards (HQS) Enforcement Requirement Repeat Findings: No Criteria: For units under Housing Assistance Payment (HAP) contract that fail to meet HQS, the Public Housing Agency (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 (24 CFR sections 982.158(d) and 982.404). Condition and Context: We tested a sample of 25 HAP contracts and found 2 tenants where a life threatening HQS deficiency was not corrected within 24 hours of the inspection. The City’s Housing Authority had approved an extension for the issue to be corrected, but no documentation of this extension was kept in the tenant file. Cause: The City does not have a consistent process to document extensions for HQS deficiencies. Effect or Potential Effect: The City would fail to comply with the U.S. Department of Housing and Urban Development’s (HUD) HQS Enforcement guidelines. Questioned Costs: Unknown. Recommendation: We recommend that the City implement a policy to properly document HQS deficiency correction extensions within the tenant files. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with Depository Agreement Requirement Repeat Findings: Yes, 2023-003 Criteria: Public Housing Authorities are required to enter into depository agreements with their financial institutions in the form required by the U.S. Department of Housing and Urban Development (HUD). The agreements serve as safeguards for Federal funds and provide third party rights to HUD. Among the terms in many agreements are requirements for funds to be placed in an interestbearing account (24 CFR section 982.156). Condition and Context: The City did not enter into a depository agreement with their financial institution until April 17, 2024. From July 1, 2023 to April 16, 2024 the City was not compliant with HUD’s depository agreement requirement. This non-compliance was brought to the attention of management during their 2024 fiscal year and was corrected soon after. Cause: The City does not have an effective policy in place to track their HUD depository agreement expiration. Effect or Potential Effect: HUD funds are not properly deposited or safeguarded. Questioned Costs: Unknown. Recommendation: We recommend that the City implements a system to track the expiration of the agreement to avoid lapses in HUD requirements. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with HUD Reasonable Rent Requirement Repeat Findings: No Criteria: The PHA must determine that the rent to the 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 10 percent decrease in the published Fair Market Rent in effect 60 days before the HAP contract anniversary. The PHA must maintain records to document the basis 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 and Context: We tested a sample of 25 HAP contracts and found 1 tenant where the rent reasonableness documentation was missing from the tenant file and therefore we could not determine if rent reasonableness was properly completed or reviewed. Cause: The City does not have an effective policy in place to ensure proper documentation of rent reasonableness. Effect or Potential Effect: The City would fail to comply with HUD’s reasonable rent guidelines. Questioned Costs: Unknown. Recommendation: We recommend that the City implements a policy to track documents necessary for a tenant’s evaluation and annual re-evaluation to ensure all are properly documented in the tenant files. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Department of Housing and Urban Development 14.871 Housing Voucher Cluster Internal Control Finding - Eligibility Repeat Finding: No Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The PHA must have sufficient internal controls in place to ensure the proper administration of HUD funding. Condition and Context: We tested a sample of 25 HAP contracts and found 2 tenants where the tenant affidavit for rental assistance benefits was not signed by a housing specialist. Therefore, these two selections did not have evidence that the tenant information was reviewed. Cause: The City does not have a proper policy in place to ensure documentation of review procedures. Effect or Potential Effect: The City could potentially create a HAP contract with a tenant that is ineligible for rental assistance. Questioned Costs: Unknown. Recommendation: We recommend that tenant evaluations and annual re-evaluations are reviewed by a supervisor prior to creating a HAP contract or renewing an existing contract to ensure tenant files are properly reviewed and documented. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Finding 2023-001 Significant Deficiency in Internal Controls Over Financial Reporting - Fiscal Year End Reporting Repeat Findings: Yes, 2022-001 Criteria: The City’s fiscal year end account balances should include all significant transactions from the reporting period and should be reconciled at fiscal year end. Condition and Context: While management informed us that adjustments would be required after the trial balances were provided to us for audit, adjustments took longer than expected. These adjustments were crucial to ensure the financial statements were complete and accurate. Effect or Potential Effect: The City’s account balances were misstated as and for the year ended June 30, 2023 prior to adjustments being made to correct such misstatements. The potential effect is that accurate information might not be available timely to make management decisions throughout the year as well as at year end. Questioned Costs: None. Recommendation: We recommend that the City review their internal controls processes and procedures over financial reporting to ensure all transactions are recorded in the City’s financial statements, and that their accounting and finance department is fully staffed to ensure timeliness of reporting. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Finding 2023-002 Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with Allowable Costs and Cost Principles Repeat Findings: Yes Criteria: Except where otherwise authorized by statute, a cost must be adequately documented in order to be allowable under Federal awards. Condition and Context: The allocation rate of the employees to the Housing Choice Voucher program was unsubstantiated. The City has no documentation, time study, or time sheets to prove that the 80% allocation is accurate. The rate being used was based on a discussion with the employee once they were hired and has not been updated since then. Cause: The City does not have an official policy to document or determine allocation rates of employees to funds other than informal discussions. The City also does not complete time studies of employees. Effect or Potential Effect: Payroll costs could be charged to the program at an improper allocation rate. Questioned Costs: Unknown. Recommendation: We recommend that the City does annual time studies or an annual review of timesheets to determine accurate allocation rates and then document this within employee personnel files. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Finding 2023-003 Department of Housing and Urban Development 14.871 Housing Voucher Cluster Non-compliance with Depository Agreement Requirement Repeat Findings: No Criteria: Public Housing Authorities are required to enter into depository agreements with their financial institutions in the form required by the U.S. Department of Housing and Urban Development (HUD). The agreements serve as safeguards for federal funds and provide third party rights to HUD. Among the terms in many agreements are requirements for funds to be placed in an interest-bearing account (24 CFR section 982.156). Condition and Context: The City has not entered into a depository agreement with their financial institution since January 2020 which expired in January 2021. There was no depository agreement active for fiscal year 2023. Cause: The City does not have an effective policy in place to track their HUD depository agreement expiration. Effect or Potential Effect: HUD funds are not properly deposited or safeguarded. Questioned Costs: Unknown. Recommendation: We recommend that the City enters into a depository agreement with their HUD funds financial institution immediately and implements a system to track the expiration of the agreement to avoid lapses in HUD requirements. Views of Responsible Officials: The City agrees with the finding. See Section V for the corrective action plan.

Finding reference: 2022-002 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 13 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 13 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-007. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was not submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, six months had variances related to HAP and port vouchers and one was filed late. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2021 as 2021-008. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan

Finding reference: 2022-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/21 ? 06/30/22 Requirement: Eligibility Type of Finding: Significant deficiency in internal control over major programs Condition: The City did not maintain appropriate documentation to support tenant eligibility and tenant income was misstated on the HUD-50058, Family Report. Criteria: Supporting documentation for eligibility including HAP contracts, income sources, inspections, rent reasonableness, and utility allowance calculations are required to be maintained for each tenant that is issued a voucher. Tenant family income is to be examined at least annually and all sources of income are to be considered in the calculation. Food stamps do not qualify as income and must be excluded. Cause: Management does not have procedures in place to maintain appropriate documentation. Also, there is no review in place after intake is performed. Effect: Tenants could be issued a voucher in error or at an erroneous amount. Context: Out of forty tenants selected for testing, there were 13 instances of missing supporting documentation and three instances of miscalculated tenant income. Recommendation: For each annual recertification, interim examination, and new intake performed, proper documentation should be maintained in the appropriate tenant file to support each line of the form HUD-50058. In order to achieve this, a checklist should be utilized and reviewed after the intake process is completed. Also, form HUD-50058 should be reviewed for accuracy and completeness. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Federal Agency: Department of Housing and Urban Development Federal Program:14.871 Housing Choice Vouchers Grant Period:07/01/20 ? 06/30/21 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 15 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 15 transactions tested, one invoice did not have support for the allocation utilized. One transaction utilized an allocation that had not been updated for several years, and it was unclear if the allocation was reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2019 as 2019-006 and June 30, 2020 as 2020-003. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Federal Agency: Department of Housing and Urban Development Federal Program:14.871 Housing Choice Vouchers Grant Period: 07/01/20 ? 06/30/21 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Also, the unaudited financial information submission was not completed timely. Criteria: The Public Housing Agency (PHA) is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. The PHA is also required to submit their unaudited financial information to HUD in the Financial Assessment Subsystem (FASS) online system two months after year end. Cause: The VMS submissions were completed timely (22 days after month end). For any required corrections that happened during the year, the HAPPY software was updated without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. The FASS unaudited submission was prepared in draft format and never submitted to HUD due to management oversight. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. HUD Notice 2021-08 states failure to meet the financial reporting requirements for unaudited submissions could result in a Late Presumptive Failure or Failure to Submit designation. If those designations are assigned to the PHA, their Section 8 Management Assessment Program (SEMAP) designation could be reduced by one level. If PHA remains delinquent in submitting the unaudited submissions after initial notification of noncompliance, other sanctions could be made including permanent reduction or offset of administrative fees as determined by HUD. Context: Out of eight months of VMS filings tested, five months had variances related to HAP and port vouchers. The unaudited financial information was submitted to HUD six months after the due date. Repeat Finding: This finding was reported for the year ended June 30, 2019 as 2019-008 and June 30, 2020 as 2020-004 related to VMS filings. Recommendation: Each month, a reconciliation needs performed between the Finance and Housing Departments? figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior-month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Also, financial information required by HUD to be included in the unaudited FASS submission should be summarized by the Finance Department, with oversight from the Housing Department, and submitted within two months of year end. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan

Finding reference: 2020-003 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/19 ? 06/30/20 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant deficiency in internal control over major programs Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented and were not consistent. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency Fund. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they should not be. Context: A sample of 17 transactions posted to non-payroll administrative accounts in the Public Housing Agency Fund were tested. Of the 17 transactions tested, three invoices did not have support for the allocation utilized. Two transactions utilized allocations that had not been updated for several years, and it was unclear if the allocations were reasonable during the period under audit. Repeat Finding: This finding was reported for the year ended June 30, 2019 as 2019-006. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.

Finding reference: 2020-004 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/19 ? 06/30/20 Requirement: Reporting Type of Finding: Material weakness in internal control over major programs; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Criteria: The Public Housing Agency is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. Cause: The Housing Director completed the VMS submissions timely (22 days after month end). For any required corrections that happened during the year, the Housing Director updated the HAPPY software without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. Context: Out of eight months tested, three months had variances related to HAP vouchers that could not be explained by management. A full reconciliation was completed six months after year end to determine that three months tested were incorrect and a prior month correction was needed in the VMS system. Repeat Finding: This finding was reported for the year ended June 30, 2019 as 2019-008.

Finding reference: 2019-006 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/18 ? 06/30/19 Requirement: Allowable Costs and Cost Principles Type of Finding: Significant Deficiency Condition: Administrative costs were charged to the Public Housing Agency using allocations that were not documented, were not consistent, and were not reviewed. Criteria: Administrative costs should be allocated to the Public Housing Agency consistently. These allocations should be reviewed annually to determine if changes are necessary. All invoices require a signature of approval. Cause: Management does not have procedures in place to review allocations being utilized for the Public Housing Agency fund. Procedures are in place to put an authorizing signature on each invoice, but due to oversight, several were missed. Effect: Administrative costs could be charged to the program at an improper allocation rate or could be charged to the program when they shouldn?t be. Context: A sample of twenty transactions posted to non-payroll administrative accounts in the Public Housing Agency fund were tested. Of the twenty transactions tested, three invoices did not have support for the allocation utilized. Eight transactions utilized allocations that had not been updated for several years and it was unclear if the allocations were reasonable during the period under audit. Three invoices allocated to the Public Housing Agency fund did not have an authorizing signature present. Recommendation: The City of Westminster should perform an analysis of administrative costs allocated across the funds to determine proper allocations for each type of cost. Once approved, these allocations should be distributed to the Finance Department and employees responsible for authorizing invoices. Authorizing signatures should be verified during the check signing or ACH process. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan

Finding reference: 2019-007 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/18 ? 06/30/19 Requirement: Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Condition: The depository agreement was out of date and Public Housing Agency funds were not held in an interest-bearing account. Criteria: Public Housing Agencies are required to enter into a depository agreement with their financial institution in the form required by HUD and comply with the stated terms. Terms of the agreement state all monies deposited by the Public Housing Agency with the Depository should be credited to a separate interest-bearing account. Cause: Management was unaware that the depository agreement was out of date and that funds were required to be held in an interest-bearing account. Effect: An expired agreement could put the safeguards around Federal funds in jeopardy. Context: The depository agreement in place was dated October 12, 2011 and was completed with HUD form 51999. This form expired on September 30, 2013. Funds were maintained in a non-interest bearing account at the Depository. Recommendation: The City of Westminster should contact the Depository to execute an HUD form and transfer the funds to an interest bearing account. We commend management for addressing this finding as soon as it was brought to their attention. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan

Finding reference: 2019-008 Federal Agency: Department of Housing and Urban Development Federal Program: 14.871 Housing Choice Vouchers Grant Period: 07/01/18 ? 06/30/19 Requirement: Reporting Type of Finding: Material Weakness; Noncompliance Condition: Monthly Voucher Management System (VMS) reports were filed with inaccurate balances and were not corrected timely. Criteria: The Public Housing Agency is required to complete monthly reporting in the HUD VMS online system. Prior month corrections are to be made timely and not at the end of the reporting year. Cause: The Housing Director completed the VMS submissions timely (22 days after month end). For any required corrections that happened during the year, the Housing Director updated the HAPPY software without entering a prior month correction in VMS. Monthly submissions to VMS were never reviewed for accuracy. Effect: HUD utilizes the monthly submissions to VMS to adjust funding amounts provided to the Public Housing Agency. The failure to update incorrect amounts timely could result in incorrect funding. Context: Out of eight months tested, four months had variances related to HAP vouchers and six months had variances related to portability vouchers that could not be explained by management. A full reconciliation was completed six months after year-end to determine that four months tested were incorrect and a prior month correction was needed in the VMS system. Recommendation: Each month, a reconciliation needs performed between the finance and housing department figures utilized for VMS reporting. If a reconciling item exists, it should be documented accordingly. Supporting documentation should be maintained for each filing submitted through VMS. If a correction occurs in a subsequent month after filing is complete, a prior month correction should be entered immediately into VMS. Since VMS requires corrections to be made in the month the voucher applies to and finance records are maintained on cash basis, there will be reconciling items from time to time. At the end of the reporting year, a reconciliation should be performed to determine if any corrections were missed. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan

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