Uniontown Housing Authority

2023-001 ALN 14.872 – Public Housing Capital Funds Program – Wage Rate Requirements Condition and Criteria: The Authority, under prior management, was not able to provide necessary documentation such as the weekly certified payroll report and employee interviews as required by the Department of Labor’s Davis-Bacon Act. The Davis-Bacon Act requires a contractor whose contract is over $2,000 to provide weekly certified payrolls to prove that they are paying prevailing wage rates. Amount of Questioned Costs: None. Context: Under prior management, as a result of the determination that the internal controls over Davis-Bacon wage rate requirements were likely to be ineffective, and due to the fact that the Authority explained that they could not locate any weekly certified payrolls or interviews for our audit, no tests of noncompliance were performed. Cause: No procedure exists for Capital Fund Program projects to follow up on stipulations within the contract requiring contractors to submit weekly wage reports, nor does a procedure exist whereby the Authority interviews contracted employees to ensure they are being paid fairly. Effect: The Authority does not have proper controls in place to ensure compliance with the Department of Labor’s Davis-Bacon Act. As a result, contractors could be underpaid while working on Authority projects. Auditor’s Recommendation: Implement procedures to follow up on the obligations of contractors to produce weekly wage reports and compare them with prevailing wage rates. Also, make physical inspections and interview employees to ascertain that the information is accurate. Grantee Response: Current management acknowledges the finding and will follow the auditor’s recommendation.

UNIONTOWN HOUSING AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED DECEMBER 31, 2019 2019-001 CFDA#10.415 ? Rural Rental Housing Loans Program ? Eligibility Condition and Criteria: During our audit, it was determined that internal control deficiencies over compliance existed over the Authority?s Rural Development eligibility determination process. The Authority had inadequate internal controls over the Authority?s Rural Development tenant eligibility process which has led to incomplete and inaccurate eligibility documentation. Out of nine tenant files tested for eligibility compliance, 89% of these files had exceptions where they were either missing third-party verification of income sources, missing or improperly filled out HUD required forms, missing EIV documentation, and/or missing a tenant's initial application and move in documentation. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. In accordance with Rural Development eligibility compliance requirements, Uniform Guidance Single Audit compliance requires that for tenant eligibility, tenant files include certain information and documentation that is both accurate and complete such as to obtain and document third-party verification of annual income and other factors that affect the determination of adjusted income or income-based rent, and then properly calculate the rent payment using this documentation. Per 24 CFR sections 5.230, 5.609, and 982.516, tenants are required to provide necessary information, documentation, and releases for the Authority to verify income eligibility. Amount of Questioned Costs: Not applicable Context: We noted that 89% of the files tested had issues relating to missing third-party verification of income sources, missing or improperly filled out Rural Development required forms, missing EIV documentation, and/or missing a tenant's initial application and move in documentation. Two instances were noted where supporting third-party verification of income and/or deductions was missing. Five instances were noted where the Authority did not have the tenant sign HUD Form 9887 or 9887-A for 2019. One instance in which the Authority did not have the necessary Declaration of Citizenship Status (Section 214) form for all family members. One instance where the Authority could not locate the tenant's initial application and move in documentation. Five instances were noted where the Authority did not run an EIV Report to adequately verify a tenant's reported income. Lastly, the Authority did not run an EIV Report within 90 days of a tenant's move in date to check for unreported income. We determined that these internal control deficiencies and resulting noncompliance appeared to be consistent and prevalent among the Authority's tenant files. Cause: The Authority?s internal controls over the Rural Development eligibility determination process that were in place lacked the necessary controls over information and communication of Rural Development regulatory requirements to properly follow HUD?s eligibility requirements as determined by 24 CFR. There appears to be a lack of quality control procedures in place regarding the monitoring of tenant files in order to catch inaccurate and/or incomplete required tenant eligibility documentation. Effect: Some of the Authority?s tenants were not and/or potentially are not receiving the correct amount of Housing Assistance Payments, which in turn, can cause the tenants' portion of rent payments owed to be incorrect. Some of these tenants may still be receiving an erroneous Housing Assistance Payment and could be paying the wrong amount until the staff and management can perform interim reexaminations or annual reexaminations. Auditor?s Recommendation: We recommend the Authority review the internal controls over Rural Development eligibility to improve the detection and correction of misstatements. The Authority should ensure that all third-party verification of income and deductions is being obtained. This should include running the EIV Report annually as well as within 90 days of a new tenant's move in date. The Authority should also ensure that HUD Form 9887 and 9887-A is properly signed annually, as this document expires after 15 months. Additionally, the Authority should continue performing internal quality control re-inspections (not to be performed by the same employee who performed the original lease-up or reexamination but by someone with adequate knowledge of the tenant eligibility process) of a sample of applicant and tenant files to ensure that all eligibility and reexamination steps are being performed properly and in line with Federal regulations and the Authority's policies and procedures. Grantee Response: The Executive Director acknowledges the finding and is following the auditor?s recommendation.