Lake Wales Housing Authority

2024-001 - Rent Reasonableness Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Choice Voucher Cluster Assistance Listing Number: 14.871 Federal Award Identification Number and Year: FL071 - 2024 Award Period: 07/01/2023-06/30/2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: The PHA must determine that the rent to 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 five 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: Of the tenant files provided, auditor noted one instance where the Authority could not provide a copy of the reasonable rent report to support the determination that the new rent was reasonable when compared to the market for the rent increase and two instances where the rent reasonableness was performed after the effective date and the housing assistance payment was paid before rent reasonableness was performed. Questioned Costs: $1,012 Context: Out of 8 files, 3 files contained errors as noted above. Cause: The Authority failed to provide adequate monitoring and oversight to ensure compliance with HUD rules and regulations, as well as their administrative policy. Effect: The Authority does not have adequate procedures in place to ensure that rent reasonableness is performed for rent increases. Repeat Finding: No Recommendation: The Authority should designate an individual to review tenant files to ensure that rent reasonableness is properly performed before the effective date and maintained in the file. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: FL071-00000120D, FL071-00000121D, FL071-00000122D, FL071-00000220D, FL071-00000221D, FL071-00000222D Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Authority should meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. The Entity should conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319 and 200.320. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During the testing of the Public Housing contract files, certain eligibility deficiencies were noted as summarized below: Number of Instances Finding 1 The Authority did not follow their policy with contracts that had expenses during the fiscal year as they did not go through the procurement process. 1 The Authority did not verify the vendor's eligibility regarding suspension and debarment prior to signing the agreement for services Questioned costs: Undeterminable Context: During our testing, we reviewed the contract, which contained the error noted above. The sample was a statistically valid sample. Cause: The Authority failed to have an updated procurement policy, until an updated was approved on September 20,2022, that adheres to Unform Grant Guidance. Effect: The Authority is out of compliance by not following their procurement policy. Recommendation: We recommend that the Authority update its Procurement Policy from 2009, which was done on September 30, 2022, putting in place the procedures listed in the UG and clarifying procurement methods. As well as, including in the policy that all vendors' eligibility needs to be verified prior to signing contracts, either through SAM or by collecting a certification form from the vendor. Views of responsible officials: There is no disagreement with the finding.

Finding 2021 ? 001 ? Procurement Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Award Period: July 1, 2020 to June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Entity should meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. The Entity should conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319 and 200.320. When a non-Federal entity enter into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During the testing of the Public Housing contract files, certain eligibility deficiencies were noted as summarized below: Number of Instances Finding 3 The Authority did not follow their policy with contracts that had expenses during the fiscal year as they did not go through the procurement process. 3 The Authority did not verify the vendor's eligibility regarding suspension and debarment prior to signing the agreement for services Questioned costs: Undeterminable Context: During our testing, we reviewed 3 contracts, 3 of the contracts contained the error noted above. The sample was a statistically valid sample. Cause: The Authority failed to have an updated procurement policy that adheres to Uniform Grant Guidance. Effect: The Authority is out of compliance by not following their procurement policy. Recommendation: We recommend that the Authority update its Procurement Policy from 2009, putting in place the procedures listed in the UG and clarifying procurement methods. As well as, including in the policy that all vendors' eligibility needs to be verified prior to signing contracts, either through SAM or by collecting a certification form from the vendor.

2019 ? 001 ? Rent Reasonableness Federal agency: U.S. Department of Housing and Urban Development Federal program title: Housing Choice Voucher CFDA Number: 14.871 Award Period: July 1, 2018 to June 30, 2019 Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: The PHA must determine that the rent to 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 five 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: During the testing of the Housing Choice Voucher Program tenant files, certain special provision compliance deficiencies were noted as summarized below: Number of Instances Finding 5 The rent reasonableness was performed after the effective move-in date. Questioned costs: Undeterminable Context: During our testing, we reviewed 18 tenant files that required a rent reasonableness; 5 tenant files contained errors as noted above. Cause: The Authority outsourced its rent reasonableness to a third-party company. The third-party company was not performing these timely. In addition, the Authority did not have a monitoring control in place to ensure rent reasonableness was being done before the effective date. Effect: The Authority is not in compliance with federal regulations regarding the determination of reasonable rent. Inaccurate data could cause the Authority to be paying a higher than market rate rent to a landlord. Recommendation: We recommend that the Authority designate an individual to implement controls to ensure their third-party service provider is performing rent reasonableness in a timely manner. Views of responsible officials: There is no disagreement with the audit finding.