RALEIGH COUNTY HOUSING AUTHORITY DBA SOUTHERN WV HOUSINGLocal Government

2024-001 – ALN 14.871 – Housing Choice Voucher Program - Eligibility Condition and Criteria: H&P identified 3 deviations out of 25 files where the file was missing required forms for admission or continued occupancy, including lack of a citizenship form for a family member, lack of two forms of identification for a family member, and lack of a signed HUD Form 9886 for all family members over the age of 18. H&P noted an exception in which 4 out of 25 files had the incorrect utility allowance and/or payment standard, which directly affects the Authority's and tenant's contributions towards rent. In addition, H&P noted the Authority is not retaining copies of current or older EIV reports after they are printed; therefore, we were only able to verify 2 instances in which EIV reports are being adequately run within 120 days of a tenant's move in date and ensuring the tenant is properly reporting income. These deviations resulted in compliance exceptions and are the result of internal control deficiencies. In accordance with HUD requirements, the Authority is required to maintain compliance with various HCV program compliance requirements identified in the Uniform Guidance. The applicable compliance provisions include Tenant Eligibility and Rent Reasonableness. During our audit, it was determined that internal control deficiencies over compliance existed in the Authority's HCV eligibility process. The Authority's internal controls over their eligibility process are deficient, as the Authority's staff failed to adequately apply the controls that have been implemented over family income examinations and reexaminations. Amount of Questioned Costs. None. Context: Three deviations out of twenty-five files where the file was missing required forms for admission or continued occupancy, including lack of a citizenship form for a family member, lack of two forms of identification for a family member, and lack of a signed HUD Form 9886 for all family members over the age of 18. Four out of twenty-five files had the incorrect utility allowance and/or payment standard, which directly affects the Authority's and tenant's contributions towards rent. The Authority is not retaining copies of current or older EIV reports after they are printed Cause: The Authority's management and staff who are responsible for the HCV eligibility did not design or implement adequate internal controls. Effect: Some of the Authority's tenants were not and/or are potentially not paying the correct amount of rent. In addition, our Firm was unable to determine if the Authority is utilizing the EIV system for new move-ins. Auditor’s Recommendation: We recommend the Authority review the internal controls over eligibility of the HCV program to maintain proper compliance with HUD's rules and regulations. The Authority needs to ensure that employees are fully and adequately trained in performing the procedures necessary to maintain proper compliance. The staff and management should continue to obtain training through related training seminars and classes and to monitor HUD news and notices for any new guidance or change to the public housing industry. The Authority should also strengthen their monitoring controls to improve the detection and correction of misstatements by ensuring that any errors, discrepancies, or instances of noncompliance are detected and corrected in a timely manner. We also recommend that someone other than the employee performing the family income examinations and reexaminations perform periodic internal audits of tenant files to ensure that all eligibility and reexamination steps are being performed properly and in line with Federal regulations. Grantee Response: Current management acknowledges the finding and the Authority's management is currently implementing the necessary changes and training to remediate these noncompliance instances.

2021-001 CFDA#: 14.871 - Housing Voucher Cluster - Allowable Costs/Cost Principles Condition and Criteria: During our audit, we identified unallowable costs in the form of interest charges, fines and penalties. We also identified costs that did not have adequate supporting backup documentation to allow for us to determine whether or not the costs were allowable. Per 2 CFR ? 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart E ? Cost Principles, costs must meet certain general criteria in order to be allowable under Federal awards. These criteria include the fact that costs must conform to any limitations or exclusions set forth in the cost principles or in the Federal awards as to types or amount of cost items, and costs must be adequately documented. Amount of Questioned Costs: None Context: Of the 12 months of disbursements for the fiscal year ended June 30, 2021, we examined 40 disbursements. Of these 40 disbursements that we tested; we could not locate adequate supporting backup documentation for 10 of these disbursements. However, of these 10 disbursements, 9 were a charge to the Authority?s credit card and each expense was itemized on the credit card statement. Also, 4 of the 40 tested disbursements had costs that included unallowable accrued interest charges and late fee penalty charges. As the total likely questioned costs were determined to be below $10,000, no question cost amount was required to be reported in this finding. Cause: The Authority?s internal controls over the purchasing and payables process were inadequate in monitoring and identifying where unallowable costs were incurred and where costs were incurred without maintaining adequate documentation to properly check for potential unallowable costs. The persons who are responsible for reviewing and approving costs did not have an adequate knowledge of the applicable Cost Principles. The Authority requires all checks to be signed by the Executive Director and Chairman after review of the checks and backup invoices, pay requests and receipts. However, the Authority uses electronic signatures with the Executive Director having access to both signatures access codes, and for the most part, the Executive Director or Chief Financial Officer prints the checks for payment without having the Chairman review over the checks and supporting backup prior to making the payments. However, these controls are not operating properly as unallowable costs were not identified during the fiscal year-ended June 30, 2021. Effect: A lack of internal controls could lead to unnecessary fines and penalties being incurred, which are unallowable costs under 24 CFR 200. The Authority incurred known unallowable costs during the fiscal year-ended June 30, 2021. The Authority also could have incurred additional unallowable costs related to the checks that were paid during the year that did not have adequate supporting backup documentation. However, these questioned costs could not be determined to be either allowable or unallowable as a result of the lack of adequate documentation. Auditor?s Recommendation: The Authority should be more aware of it's credit card statement due dates to avoid paying future late fees. The Authority should match each item on the charge card bill with the receipt and supporting document that is sufficient to ensure that all expenditures are allowable costs and adequately supported. We recommend the Authority review the internal controls over their purchases and payables internal controls to ensure that adequate monitoring over whether or not costs incurred are allowable and adequately supported. We also recommend that the persons responsible for reviewing and approving costs review over the applicable Cost Circulars to ensure they have an adequate understanding of what costs are allowable and what costs are unallowable. Lastly, we recommend the Authority and the Board of Commissioners review over the Check Signing Policy and make the necessary amendments to this Policy to allow for this Policy to be more effective and efficient. Grantee Response: The Interim Executive Director acknowledges the finding and will follow the auditor?s recommendation. The Interim Executive Director acknowledges the finding and will follow the auditor?s recommendation.