CHARLESTON COUNTY HOUSING & REDEVELOPMENT AUTHORITYLocal Government

2025-002 ALN 14.850 – Public Housing Operating Fund – Eligibility Condition and Criteria: In accordance with HUD eligibility requirements set forth in 24 CFR § 5, subpart F and § 960.259, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Public Housing Operating Fund program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority’s personnel responsible for eligibility determination procedures were not properly filing annual and interim recertifications form HUD-50058 in tenant files. Amount of Questioned Costs: None. Context: Within the 20 tenant files selected and tested for compliance with laws and regulations, 3 of the tenant files tested did not have an EIV report, 3 of the tenant files tested did not have a copy of the requested HUD-50058, and 3 of the tenant files tested did not have adequate 3rd party support for income. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Public Housing tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation per 24 CFR § 5, subpart F and § 960.259 is maintained. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2025-003 ALN 14.871 – Housing Voucher Cluster – Eligibility Condition and Criteria: In accordance with HUD requirements, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility for the HCV program. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Housing Choice Voucher program process of maintaining required documentation in tenant files per HUD regulatory requirements. 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: Within the 25 tenant files selected and tested for compliance with laws and regulations, 2 tenant files tested did not have the requested copy of HUD-50058, 1 tenant file tested had an incorrect payment standard, and 1 tenant file tested had an incorrect income deduction. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Housing Choice Voucher tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation is maintained per Federal regulations and the Authority's Section 8 Administrative Plan. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-001 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Totals, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2024. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified a variance in the Data Collection Report line for HAP - Portability In, Unrestricted Net Position and Restricted Net Position when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-003 ALN 14.850 – Public Housing Operating Fund – Eligibility Condition and Criteria: In accordance with HUD eligibility requirements set forth in 24 CFR § 5, subpart F and § 960.259, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Public Housing Operating Fund program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority’s personnel responsible for eligibility determination procedures were not properly filing annual and interim recertification's form HUD-50058 in tenant files. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 1 of these tenant files was unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on this tenant file. Additionally, 9 of the tenant files tested did not have an EIV report, 1 tenant file tested did not have a signed Declaration of Section 214 Status, 2 of the tenant files tested did not have a copy of the requested HUD-50058, and 1 of the tenant files tested did not have adequate 3rd party support for income. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Public Housing tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation per 24 CFR § 5, subpart F and § 960.259 is maintained. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2024-004 ALN 14.871 – Housing Voucher Cluster – Eligibility Condition and Criteria: In accordance with HUD requirements, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility for the HCV program. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Housing Choice Voucher program process of maintaining required documentation in tenant files per HUD regulatory requirements. 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: Within the 25 tenant files selected and tested for compliance with laws and regulations, 1 of these tenant files was unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on this tenant file. Additionally, 10 of the tenant files tested did not have an EIV report, 5 of the tenant files tested were missing a signed Declaration of Section 214 Status, 1 tenant file tested did not have the requested copy of the HUD-50058, 10 tenant files tested did not have a copy of the up to date signed HAP contract, 3 tenant files tested had an incorrect utility allowance used, and there was 1 instance of a system failure that caused an additional payment. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Housing Choice Voucher tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation is maintained per Federal regulations and the Authority's Section 8 Administrative Plan. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2023-001 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Total, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2023. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified a variance in the Data Collection Report line for UNP and RNP when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2023-003 ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires the Data Collection Form to be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Additionally, a nonfederal entity that expends $750,000 or more during the nonfederal entity's fiscal year in Federal awards must have a single or program specific audit conducted that year in accordance with the provisions of the Uniform Grant Guidance, Part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F, Audit Requirements". The federal single audit must be completed and the data collection form and the reporting package (as defined in the Uniform Grant Guidance), be submitted within 30 days after receipt of the auditors' report or nine months after year end, whichever comes earlier. Pursuant to the reporting requirements of 24 CFR, Part 5, Subpart H, entities receiving HUD financial assistance, must electronically submit audited financial and other information to the Real Estate Assessment Center ("REAC") no later than nine months after the Housing Authority's fiscal year end. Amount of Questioned Costs: None. Context: The fiscal year 2023 audit was not filed within nine months of fiscal year end due to prior management not completing their audit in a timely manner. Cause: Prior management's process for completing the audit was not adequate in filing the audit in a timely manner. Effect: The Housing Authority is not considered a low-risk auditee for fiscal year 2024 and must meet the 40% coverage rule for testing federal expenditures under the Uniform Guidance requirements. Auditor’s Recommendation: We recommend that the new management submit the annual financial statement audit and single audit, as applicable, in a timely manner and to ensure that the Data Collection Form is filed by the due date required in the Uniform Guidance Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

2023-004 ALN 14.850 – Public & Indian Housing – Eligibility Condition and Criteria: In accordance with HUD eligibility requirements set forth in 24 CFR § 5, subpart F and § 960.259, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Low Rent Public Housing program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority’s personnel responsible for eligibility determination procedures were not properly filing annual and interim recertification's form HUD-50058 in tenant files. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 2 of these tenant files were unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on these 2 tenant files. Additionally, 2 of the tenant files tested used the incorrect utility allowance and 3 of the tenant files tested did not have adequate 3rd party support for income or miscalculated tenant income. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Low Rent Public Housing tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation per 24 CFR § 5, subpart F and § 960.259 is maintained. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Total, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2022. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified a variance in the Data Collection Report line for UNP when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.850 – Public & Indian Housing – Operating Subsidy and Utilities Expense Level Calculation Condition and Criteria: Per 24 CFR § 990.170, a Public Housing Agency (PHA) must calculate Utilities Expense Level (UEL) based on its consumption for each utility, the applicable rates for each utility, and an applicable inflation factor. The UEL for a given funding period is the product of the utility rate multiplied by the payable consumption level multiplied by the inflation factor. The UEL is expressed in terms of Per Unit Month (PUM) costs. The utility rate for each type of utility will be the actual average rate from the most recent 12-month period that ended June 30th prior to the beginning of the applicable funding period. The rate will be calculated by dividing the actual utility cost by the actual utility consumption, with consideration for pass-through costs (e.g., state and local utility taxes, tariffs) for the time period specified in this paragraph. During our testing of HUD forms 52722 and 52723 (Calculation of Operating Subsidy and Utilities Expense Level), it was determined that the PHA failed to correctly report electricity consumption in the 2022 UEL calculation for Project SC056000001. This error was not detected prior to our audit, which indicates deficiencies in the PHA’s monitoring of the calculation of utilities expense level. Amount of Questioned Costs: None. Context: In testing the Authority’s Calculation of Operating Subsidy and Calculation of Utilities Expense Level, we noted that the calculation for the fiscal years ended June 30, 2022 inaccurately reported costs related to electricity consumption. The Authority’s procedures related to the monitoring of compliance with HUD regulatory requirements did not detect this prior to our audit. Cause: The Authority’s internal controls over the Low Rent Operating Subsidy and Utilities Expense Level calculation process that were in place lacked the necessary controls over monitoring of related HUD regulatory requirements. Effect: The Authority could be receiving subsidy amounts that are smaller than the Authority needs to operate on an annual basis. The Authority may not detect errors to the calculation of operating subsidy and utilities expense level in a timely manner. Auditor’s Recommendation: Implement procedures to monitor compliance with HUD regulatory requirements related to the Authority’s calculation of operating subsidy and utilities expense level. Management should implement some form of supervisory review process to ensure that operating subsidy and utilities expense level calculations are complete and accurate. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires the Data Collection Form to be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Additionally, a nonfederal entity that expends $750,000 or more during the nonfederal entity's fiscal year in Federal awards must have a single or program specific audit conducted that year in accordance with the provisions of the Uniform Grant Guidance, Part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F, Audit Requirements". The federal single audit must be completed and the data collection form and the reporting package (as defined in the Uniform Grant Guidance), be submitted within 30 days after receipt of the auditors' report or nine months after year end, whichever comes earlier. Pursuant to the reporting requirements of 24 CFR, Part 5, Subpart H, entities receiving HUD financial assistance, must electronically submit audited financial and other information to the Real Estate Assessment Center ("REAC") no later than nine months after the Housing Authority's fiscal year end. Amount of Questioned Costs: None. Context: The fiscal year 2022 audit was not filed within nine months of fiscal year end due to prior management not completing their audit in a timely manner. Cause: Prior management's process for completing the audit was not adequate in filing the audit in a timely manner. Effect: The Housing Authority is not considered a low-risk auditee for fiscal year 2023 and must meet the 40% coverage rule for testing federal expenditures under the Uniform Guidance requirements. Auditor’s Recommendation: We recommend that the new management submit the annual financial statement audit and single audit, as applicable, in a timely manner and to ensure that the Data Collection Form is filed by the due date required in the Uniform Guidance Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.850 & 14.871 – Public & Indian Housing and Housing Choice Voucher Cluster – Allowable Costs Condition and Criteria: In accordance with the cost principles under 2 CFR part 200, subpart E, costs must be necessary and reasonable for the performance of the Federal award, conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E, and be adequately documented. During our audit, it was determined that internal control deficiencies over compliance existed related to the Authority’s compliance with the Housing Choice Voucher and Low Rent Public Housing Program’s allowable costs/cost principles compliance provisions. Identified control and compliance deviations included costs that were not adequately documented. Amount of Questioned Costs: $8,872 Context: The lack of supporting documentation was observed for 7 out of the 40 check disbursements tested during our audit, including check disbursements from both Low Rent Public Housing and Housing Choice Voucher programs. The Authority was unable to locate supporting documentation for 7 of the 40 checks disbursements tested including check vouchers, invoices, or pay requests. Cause: The Authority’s management’s internal controls over the Low Rent Public Housing and Housing Choice Voucher Program’s allowable costs/cost principles compliance provision that were in place were deficient. Staff who had the ability to make purchases and procure contracts did not adequately follow the cost principles included in 2 CFR part 200, subpart E, and therefore the Authority did not have adequate support for check disbursements. Effect: The Authority could incur costs that are unallowable and that are not necessary or reasonable. These internal control deficiencies could result in a possibility that errors or irregularities relating to costs can exist and not be detected by the Authority’s internal controls. Auditor’s Recommendation: We recommend that the Authority’s management perform the necessary steps to ensure that all disbursements are sufficiently documented and supported by adequate backup. We recommend the Authority implement controls to detect when check disbursements do not have adequate support in accordance with 2 CFR part 200, subpart E. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.850 – Public & Indian Housing – Eligibility Condition and Criteria: In accordance with HUD eligibility requirements set forth in 24 CFR § 5, subpart F and § 960.259, the Authority is required to obtain the necessary information, documentation, and releases for the Authority to verify income eligibility. The Authority is also required to obtain and document third party verification of annual income, the value of assets, expenses related to deductions, and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the tenant's rent payment using this documentation. It is then required to accurately complete the tenant's form HUD-50058 report at least every 12 months and maintain these reports in the tenant files. During our audit, it was determined that significant deficiencies in internal controls existed over the Authority’s Low Rent Public Housing program process of maintaining required documentation in tenant files per HUD regulatory requirements. The Authority’s personnel responsible for eligibility determination procedures were not properly filing annual and interim recertification's form HUD-50058 in tenant files. Amount of Questioned Costs: None. Context: Within the 25 tenant files selected and tested for compliance with laws and regulations, 3 of these tenant files were unable to be located by the Authority. Therefore, we were unable to perform eligibility testing on these 3 tenant files. Cause: The Authority did not have adequate internal controls in place over monitoring required documentation in tenant files and the retention of annual and interim re-certifications for Low Rent Public Housing tenants. Effect: The Authority is not in compliance with HUD requirements over documentation in tenant files. The Authority potentially could be improperly performing annual and interim reexaminations. This could cause some of the tenants to pay an incorrect rent amount in accordance with HUD eligibility rules and regulations. Auditor’s Recommendation: We recommend that the Authority review documentation requirements regarding tenant files. We recommend the Authority implement adequate processes and procedures to ensure all required tenant files documentation per 24 CFR § 5, subpart F and § 960.259 is maintained. The Authority should also begin performing quality control procedures including internal audits of tenant files to ensure that these files are accurate and complete. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: As part of our Single Audit testing of Housing Choice Vouchers Program Reporting, we tested the monthly Data Collection Reporting within the Voucher Management System (VMS) online within HUD’s Real Estate Assessment Center (REAC) website. Testing revolved around the accuracy and completeness of reporting within the Total Vouchers, HAP Total, Unrestricted Net Position (UNP) as of the Last Day of the Month, and Restricted Net Position (RNP) as of the Last Day of the Month Data Collection Report lines for the entire fiscal year ended June 30, 2021. Amounts reported on these lines were tested against the Authority’s financial reports including the general ledger reports and Unaudited Financial Data Schedule (FDS). During our audit, it was determined that noncompliance in internal controls existed over the Authority's Housing Voucher Cluster VMS reporting process containing materially correct information and being compliant with HUD financial reporting requirements. The Authority must adequately prepare the VMS Data Collection Report on a monthly basis to reflect the month's vouchers, HAP totals, net position balances, and other housing choice voucher specific attributes. The Authority must properly prepare this and retain corresponding documentation for the calculation of the data reported. Amount of Questioned Costs: None. Context: During testing, we identified variances in the Data Collection Report lines for UNP and RNP when compared against the general ledger reports and Unaudited FDS. The Authority's did not have adequate backup for amounts reported on the VMS such as the 2 Year-Tool that the Housing Authority has access to from HUD. Therefore, amounts reported on the current year VMS were misstated. Cause: The Authority's VMS reconciliation process used to determine the amounts to be reported on the VMS did not adequately reflect UNP and RNP. Effect: Amounts reported in the Data Collection Reports in VMS were misstated, which may have an impact on the Authority's monthly Housing Choice Vouchers program funding. Auditor’s Recommendation: We recommend that current management at the Authority compare the General Ledger, internally prepared reconciliation, and VMS report monthly to ensure all amounts are correctly reported and reflected. We also recommend the Authority implement internal control procedures that will adequately meet all of the Authority's reporting requirements. The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.850 – Public & Indian Housing – Operating Subsidy and Utilities Expense Level Calculation Condition and Criteria: Per 24 CFR § 990.170, a Public Housing Agency (PHA) must calculate Utilities Expense Level (UEL) based on its consumption for each utility, the applicable rates for each utility, and an applicable inflation factor. The UEL for a given funding period is the product of the utility rate multiplied by the payable consumption level multiplied by the inflation factor. The UEL is expressed in terms of Per Unit Month (PUM) costs. The utility rate for each type of utility will be the actual average rate from the most recent 12-month period that ended June 30th prior to the beginning of the applicable funding period. The rate will be calculated by dividing the actual utility cost by the actual utility consumption, with consideration for pass-through costs (e.g., state and local utility taxes, tariffs) for the time period specified in this paragraph. During our testing of HUD forms 52722 and 52723 (Calculation of Operating Subsidy and Utilities Expense Level), it was determined that the PHA failed to correctly include sewer and water consumption in the 2021 UEL calculation for Project SC056000235. This omission was not detected prior to our audit, which indicates deficiencies in the PHA’s monitoring of the calculation of utilities expense level. Amount of Questioned Costs: None. Context: In testing the Authority’s Calculation of Operating Subsidy and Calculation of Utilities Expense Level, we noted that the calculation for the fiscal years ended June 30, 2021 omitted costs related to sewer consumption. The Authority’s procedures related to the monitoring of compliance with HUD regulatory requirements did not detect this prior to our audit. Cause: The Authority’s internal controls over the Low Rent Operating Subsidy and Utilities Expense Level calculation process that were in place lacked the necessary controls over monitoring of related HUD regulatory requirements. Effect: The Authority could be receiving subsidy amounts that are smaller than the Authority needs to operate on an annual basis. The Authority may not detect errors to the calculation of operating subsidy and utilities expense level in a timely manner. Auditor’s Recommendation: Implement procedures to monitor compliance with HUD regulatory requirements related to the Authority’s calculation of operating subsidy and utilities expense level. Management should implement some form of supervisory review process to ensure that operating subsidy and utilities expense level calculations are complete and accurate. Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

ALN 14.871 – Housing Voucher Cluster – Reporting Condition and Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance) requires the Data Collection Form to be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Additionally, a nonfederal entity that expends $750,000 or more during the nonfederal entity's fiscal year in Federal awards must have a single or program specific audit conducted that year in accordance with the provisions of the Uniform Grant Guidance, Part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F, Audit Requirements". The federal single audit must be completed and the data collection form and the reporting package (as defined in the Uniform Grant Guidance), be submitted within 30 days after receipt of the auditors' report or nine months after year end, whichever comes earlier. Pursuant to the reporting requirements of 24 CFR, Part 5, Subpart H, entities receiving HUD financial assistance, must electronically submit audited financial and other information to the Real Estate Assessment Center ("REAC") no later than nine months after the Housing Authority's fiscal year end. Amount of Questioned Costs: None. Context: The fiscal year 2021 audit was not filed within nine months of fiscal year end due to prior management not completing their audit in a timely manner. Cause: Prior management's process for completing the audit was not adequate in filing the audit in a timely manner. Effect: The Housing Authority is not considered a low-risk auditee for fiscal year 2022 and must meet the 40% coverage rule for testing federal expenditures under the Uniform Guidance requirements. Auditor’s Recommendation: We recommend that the new management submit the annual financial statement audit and single audit, as applicable, in a timely manner and to ensure that the Data Collection Form is filed by the due date required in the Uniform Guidance Grantee Response: The Chief Executive Officer agrees with the finding and will follow the Auditor's recommendations.

SIGNIFICANT DEFICIENCY 2020-002 Eligibility Housing Choice Voucher ? CFDA# 14.871 (Repeat Finding # 2019-001) Condition and Criteria: Income calculations performed during examinations contained errors. PHA?s are required to determine income eligibility and calculate the tenant?s rent payment using sufficient, appropriate documentation in accordance with HUD regulations. Questioned Cost: Known questioned costs totaled $2,448. Effect or Potential Effect: Overpayment of Housing Assistance Payments due to income calculation errors. Cause: Lack of staff adherence to administrative policies related to annualizing wages and ineffective quality control procedures. Context: A sample of 40 files were selected to audit income calculations from a population of 1,044. The test found 3 files with some form of income calculation deficiency, two of which contributed to the known question cost. Our sample was a statistically valid sample. Auditor?s Recommendation: We recommend the Authority continue its corrective action regarding updating income calculation policies used to annualize income and monitor staff performance, including increased quality control reviews, to ensure compliance with HUD regulations. Management?s Response: Management agrees with the finding and corrective action has been taken as detailed in the Corrective Action Plan.

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