ROANOKE-CHOWAN REGIONAL HOUSING AUTHORITYLocal Government

Criteria: The PHA is required to maintain support of eligibility determinations that were made so support the individual program participants were determined to be eligible, and that only eligible individuals or groups of individuals participated in the program. Condition: During the year, 40 of the 4,026 tenant receipts that were received by the Authority were tested to determine if proper eligibility was determined for the program. Of the forty (40) tenant files reviewed, one (1) tenant file was missing the annual recertifcation and supporting documentation and seven (9) additional tenant file lacked the various supporting documentation. Questioned Costs: Not Determinable Cause: Staffing changes and overall turnover at the Authority was the reason for disorganization of the tenant files and the misplacement of the file selected for testing. Effect: The Authority does not have proper support to verify tenant is properly eligible for the program. Recommendation: The Authority should provide additional training to Public Housing staff to make sure the importance of tenant files and the related supporting documents related to the eligibility of program participants is readily available. Also, the Authority should consider if an electronic filing system would be to the benefit of the authority. Response: The Authority agrees with the finding is taking key actions to enhance controls related to eligibility and rent eligibility. This includes but not limited too revisiting a consulting proposal for an operational audit, completing recent staff training in rent calculations, completing a full internal file review with a compliance checklist, and evaluating an electronic document management system.

Criteria: The PHA is required to maintain support of eligibility determinations that were made so support the individual program participants were determined to be eligible, and that only eligible individuals or groups of individuals participated in the program. Condition: During the year, 40 of the 5,225 tenant receipts that were received by the Authority were tested to determine if proper eligibility was determined for the program. Of the forty (40) tenant files reviewed, one (1) tenant file was not able to be provided for review and seven (7) additional tenant file lacked the various supporting documentation. Questioned Costs: Not Determinable Cause: Staffing changes and overall turnover at the Authority was the reason for disorganization of the tenant files and the misplacement of the file selected for testing. Effect: The Authority does not have proper support to verify tenant is properly eligible for the program. Recommendation: The Authority should provide additional training to Public Housing staff to make sure the importance of tenant files and the related supporting documents related to the eligibility of program participants is readily available. Also, the Authority should consider if an electronic filing system would be to the benefit of the authority. Response: The Authority agrees with the finding is taking key actions to enhance controls realted to eligibility and rent eligibility. This includes but not limited too revisiting a consulting proposal for an operational audit, completing recent staff training in rent calculations, completing a full internal file review with a compliance checklist, and evaluating an electronic document management system.

Finding: 2022-002 Federal Agency: U. S. Department of Housing and Urban Development Federal program: N/C S/R Section 8 Program ALN #: 14.182 Award Period: 7/1/21-6/30/22 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: 24 CFR 982-516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as complete and accurate tenant files. Statement of Condition: During my testing, I noted the Authority did not follow their internal controls designed to ensure compliance with tenant Eligibility requirements. Questioned Cost: N/A Context: Testing of 25 files identified an exception in 2 files as follows: ? 2 file did not contain proper documentation of the Section 214 Declaration of Citizenship Status form. ? 1 file did not have a Release of Information form signed by all required members of the household. Form 9886 is used by HUD to obtain consent to verify income. ? 2 files did not contain evidence of income verification. ? 1 file did not contain a social security card or EIV verification for the head of household. ? 1 file did not contain evidence of an annual recertification. Cause: The Agency did not follow their eligibility intake procedures properly. Effect: The Authority is not in compliance with requirements regarding eligibility. Identification of a repeat finding: No Recommendation: I recommend that the Agency continue to review recertifications on a monthly basis to ensure the files meet eligibility and reporting requirements. Views of responsible officials and planned corrective actions: Management agrees with this finding. We have reviewed the intake procedure and will continue to review recertifications.

Finding: 2020-001 Type of Finding: Material Weakness in Reporting Criteria or specific requirement: In accordance with HUD guidelines, authorities are responsible for preparing and submitting an unaudited submission in REAC system withing two months after the year end. This Authority was required to submit this report by August 31, 2020. Statement of Condition: The REAC unaudited submission was not submitted until May 19, 2021. Questioned Cost: N/A Context: Cause: Lack of experience in yearend closeout procedures. Effect: HUD and REAC were not made aware of the financial and condition of the Authority in a timely manner. Identification of a repeat finding: None Recommendation: The Board and management should make every effort to address the issues that caused this condition. Views of responsible officials and planned corrective actions: The Authority agrees with this finding and will adhere to the correction action plan in this audit report.

Finding: 2020-002 Federal Agency: U. S. Department of Housing and Urban Development Federal program: New Construction and Substantial Rehabilitation Section 8 Program CFDA #: 14.182 Award Period: 7/1/19-6/30/20 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 24 CFR 982-516 requires internal controls to be in place to ensure compliance with HUD requirements, as well as complete and accurate tenant files. Statement of Condition: During my testing, I noted the Authority did not follow their internal controls designed to ensure compliance with tenant Eligibility requirements. Questioned Cost: N/A Context: Testing of 25 files identified an exception in 1 file as follows: ? 1 file did not contain proper documentation of the Section 214 Declaration of Citizenship Status form Cause: The Agency did not follow their eligibility intake procedures properly. Effect: The Authority is not in compliance with requirements regarding eligibility. Identification of a repeat finding: Yes Recommendation: I recommend that the Agency continue to review recertifications on a monthly basis to ensure the files meet eligibility and reporting requirements. Views of responsible officials and planned corrective actions: Management agrees with this finding. We have reviewed the intake procedure and will continue to review recertifications.

Finding: 2020-003 Federal Agency: U. S. Department of Housing and Urban Development Federal program: Public and Indian Housing CFDA #: 14.850 Award Period: 7/1/19-6/30/20 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The PHA is required to develop and maintain a system of internal controls to ensure compliance with federal regulations. 24 CFR 982.516 requires the PHA, for both family income examinations and reexaminations, to obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of the assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income. Condition: During my testing, I noted the Authority did not follow their internal controls designed to ensure compliance with tenant Eligibility requirements. Questioned Cost: Unable to determine Context: Testing of 25 tenant files identified an exception in 3 files as follows: ? No current 50058 ? No signed application ? No lease in the file ? No documentation of income verification ? No release of information for the recertification period Cause: The Authority did not perform the recertification in accordance with their stated policies and procedures and HUD regulations. Effect: The Authority is not in compliance with federal regulations regarding eligibility. Repeat Finding: No Recommendation: I recommend that the Authority continue to review recertifications on a monthly basis to ensure a majority of the files meet HUD?s eligibility and reporting requirements. Views of responsible officials and planned corrective actions: Management agrees with this finding.

Finding 2019-002 Federal Agency: U. S. Department of Housing and Urban Development Federal program: Public Housing Capital Fund CFDA #: 14.872 Type of Finding: Material Weakness Criteria or specific requirement: Section 9(j) of the United States Housing Act of 1937 and 24 CFR Section 905.306 of the Capital Fund Final Rule states that a housing authority must obligate 90 percent of the annual grant by the grant?s obligation end date. Condition: The housing authority failed to obligate 90 percent of NC19P11850115 by the grant?s obligation end date. Questioned Cost: $60,000.00 Context: The housing authority reported that they had obligated $548,412 or 100 percent of the 2015 capital fund grant by April 12, 2017. HUD determined that $60,000 of Operations money budgeted was not vouchered and ?drawn down? by the obligation end date which is the requirement. Cause: The housing authority vouchered $60,000 from BLI 1406 (Operations) on May 10, 2017, one month after obligation end date. Effect: Pursuant to Section 9(j)(3) of the Act and 24 CFR 905.306(e) the Capital Fund grant for FY 2019 will be subject to a sanction of a 1/12 reduction (1/12 for each month or portion of a month that the PHA was in noncompliance) which is $60,000. This was sanctioned from the 2019 capital grant. Repeat Finding: No Recommendation: The housing authority should monitor all capital funds and abide by all obligation and drawn down dates as required. Views of responsible officials and planned corrective actions: Management understands and agrees with this finding. All management level positions have been replaced. Each person with capital fund responsibility will receive the proper training and will abide by all deadline requirements.

Federal Agency: U. S. Department of Housing and Urban Development Federal program: Housing Choice Voucher Program CFDA #: 14.871 Award Period: 7/1/18-6/30/19 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The PHA is required to develop and maintain a system of internal controls to ensure compliance with federal regulations. 24 CFR 982.516 requires the PHA, for both family income examinations and reexaminations, to obtain and document in the family file third-party verification of (1) reported family annual income; (2) the value of the assets; (3) expenses related to deductions from annual income; and (4) other factors that affect the determination of adjusted income. Condition: During my testing, I noted the Authority did not follow their internal controls designed to ensure compliance with tenant Eligibility requirements. Questioned Cost: Unable to determine Context: Testing of 25 Housing choice Voucher files identified an exception in 6 files as follows: -1 file did not have a valid signed release of information -2 files did not have a completed application for the recertification period -1 file did not have a valid signed lease -1 file did not contain evidence of proper income verification for the recertification period -1 file did not have evidence of rent reasonableness determination Cause: The Authority did not perform the recertification in accordance with their stated policies and procedures and HUD regulations. Effect: The Authority is not in compliance with federal regulations regarding eligibility. Repeat Finding: No Recommendation: I recommend that the Authority continue to review recertifications on a monthly basis to ensure a majority of the files meet HUD?s eligibility and reporting requirements. Views of responsible officials and planned corrective actions: Management agrees with this finding. All management level positions have been replaced. We have reviewed the recertification procedure and find that our procedure should have caught this mistake. However, human error during the hectic recertification process involving multiple forms and certification resulted in this failure to secure proper signature on the Information Release Form.

Federal Agency: U. S. Department of Housing and Urban Development Federal program: N/C S/R Section 8 Program CFDA #: 14.182 Award Period: 7/1/18-6/30/19 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Rural Development guidelines require that tenant waiting lists be maintained and that the list is monitored to ensure that only current active applicants are on the list. Condition: The housing authority has not maintained the waiting lists properly. There are numerous inactive applicants on the list. Questioned Cost: N/A Context: Applicants on the waiting list for an extended period of time should be contacted to keep the list up to date. The housing authority is not performing this duty. Cause: The housing authority is not monitoring the waiting list properly. Effect: Waiting list is not updated properly and, accordingly, is not a useful tool and not following guidelines. Repeat Finding: No Recommendation: The housing authority should continuously monitor the waiting list. Any applicants that have been on it for an extended period of time should be contacted to determine if they are still interested in staying on the waiting list. Any potential tenants no longer interested should be removed from the waiting list. Views of responsible officials and planned corrective actions: Management understands and agrees with this finding. All management level positions have been replaced. We will monitor and update the waiting list as required.

Federal Agency: U. S. Department of Housing and Urban Development Federal program: N/C S/R Section 8 Program CFDA #: 14.182 Award Period: 7/1/18-6/30/19 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The PHA is required to develop and maintain a system of internal controls to ensure compliance with federal regulations. 24 CFR 880.603 requires the PHA, for both family income examinations and reexaminations, to obtain and document in the family file third-party verification of (1) reported family annual income; (2) evidence related to citizenship and eligible immigration status. Condition: During my testing, I noted the Authority did not follow their internal controls designed to ensure compliance with tenant Eligibility requirements. Questioned Cost: Unable to determine Context: Testing of 25 Housing choice Voucher files identified an exception in 2 files as follows: -1 file did not have a lease signed by all adult members of the household per HUD Handbook 4350.3 -1 file did not have a valid signed release of information Cause: The Authority did not perform the recertification in accordance with their stated policies and procedures and HUD regulations. Effect: The Authority is not in compliance with federal regulations regarding eligibility. Repeat Finding: No Recommendation: I recommend that the Authority continue to review recertifications on a monthly basis to ensure a majority of the files meet HUD?s eligibility and reporting requirements. Views of responsible officials and planned corrective actions: Management agrees with this finding. All management level positions have been replaced. We have reviewed the recertification procedure and find that our procedure should have caught this mistake. However, human error during the hectic recertification process involving multiple forms and certification resulted in this failure to secure proper signature on the Information Release Form.

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